SOL Tests Critical Support as Security Concerns Weigh on Momentum
Market Pulse
- SOL slides 15.4% this month after security breaches shake investor confidence
- RSI drops to oversold territory at 40.94 while ADX signals building bearish pressure
- Bulls defend $131 support level that’s held through multiple December tests
Solana’s price action tells a story of security-driven selling pressure meeting technical support, with SOL trading at $131.26 after shedding 15.44% over the past month. The devastating drop accelerated after the Upbit exchange hack involving 44.5 billion won worth of Solana-based assets, followed by a $3 million user exploit that exposed hidden wallet vulnerabilities. The main question for traders is: can bulls hold the line at current support despite mounting security concerns, or will fear-driven selling push SOL toward the psychological $100 level?
| Metric | Value |
|---|---|
| Asset | SOLANA (SOL) |
| Current Price | $131.26 |
| Weekly Performance | -6.80% |
| Monthly Performance | -15.44% |
| RSI (Relative Strength Index) | 40.9 |
| ADX (Average Directional Index) | 36.3 |
| MACD (MACD Level) | -6.17 |
| CCI (Commodity Channel Index, 20-period) | -30.00 |
RSI Drops to 40.94 – First Oversold Reading Since Market-Wide Washout
Reading the oscillator at 40.94, traders see momentum exhaustion that typically marks capitulation phases. This oversold condition emerged as security incidents triggered panic selling, pushing RSI below the neutral 50 line for the first time since the broader crypto market correction. The weekly RSI at 38.39 confirms the bearish momentum isn’t just a daily blip – it’s a multi-timeframe shift that suggests sellers remain in control.
What’s revealing is how RSI behaved during the security-driven selloff versus typical market corrections. Unlike gradual declines where RSI stair-steps lower, this plunge saw momentum collapse from above 60 to current levels in rapid succession. So for swing traders, this washed-out reading creates a potential bounce setup, but only if fundamental concerns about Solana’s security architecture get addressed through ecosystem improvements or positive developments.
ADX at 36.25 Signals Mature Downtrend Nearing Exhaustion Point
Trend strength readings paint a picture of conviction behind the recent selling, with ADX climbing to 36.25 – well above the 25 threshold that separates trending from choppy markets. Basically, the security incidents didn’t just cause a knee-jerk reaction; they kicked off a genuine trending move that attracted systematic sellers. The elevated reading matches levels seen during Solana’s previous major corrections, suggesting we’re in the later innings of this bearish impulse.
Since ADX rarely sustains above 40 for extended periods, current levels hint at potential exhaustion ahead. To clarify, the ADX is indicating that while bears have controlled price action convincingly, the intensity of selling pressure may be reaching unsustainable levels. Therefore, day traders should prepare for either a sharp reversal if positive catalysts emerge – like the Chainlink bridge launches providing renewed utility – or a period of consolidation as the market digests recent events.
Bulls Make Stand at 50-Day EMA Despite Broader Average Resistance
Moving average structure reveals a market in transition, with price currently testing the 50-day EMA at $140.36 from below. Price trades below the entire EMA ribbon except for the shortest-term 10-day at $136.57, creating a bearish configuration where each average above acts as potential resistance. The 20-day EMA at $139.87 rejected advances twice this week, showing sellers defend overhead levels aggressively.
Crucially, the 50-day EMA flipped from support to resistance after the security breaches triggered selling below this key level. What’s more telling is the compression between the 50-day and 100-day EMA at $156.37 – when these averages converge while price sits below both, it often precedes decisive moves. Bulls need to reclaim and hold above $140 to neutralize the bearish structure, while failure here targets the more distant 200-day EMA safety net at $170.26.
Support Architecture Builds From $115 While Resistance Stacks to $148
Immediate resistance clusters between the monthly pivot at $145.44 and the weekly R1 at $148.12, where December’s pre-hack highs align with technical levels. Above that, the psychological $150 zone and monthly R1 at $156.37 create additional barriers that would require significant buying pressure to overcome. The Chainlink bridge launches provide potential catalysts, but technical resistance remains heavy.
Bulls currently guard the monthly S1 support at $115.55, which has attracted buyers on three separate tests this month. The support structure gained reinforcement from the $123.21 weekly pivot acting as an intermediate floor. Between these levels, the $131 zone where SOL currently trades represents a critical inflection point – it’s served as both support and resistance multiple times since November.
Market structure suggests a compression phase between $115 and $148, with neither bulls nor bears showing definitive control. This range-bound behavior typically resolves with a sharp directional move once one side capitulates. Given the recent security concerns, bears hold a psychological edge, but the Solana-Base bridge developments could shift sentiment if adoption metrics improve.
Bears Target $115 Unless Bulls Reclaim $140 With Conviction
Bulls require a decisive close above the 50-day EMA at $140.36 to signal that security fears have been digested and buyers are returning. Such a move would flip the immediate resistance to support and open paths toward $148 and eventually the psychological $150 zone. The bridge launches with Coinlink and Base provide fundamental tailwinds if SOL can clear overhead supply.
The bearish scenario triggers if SOL loses the $131 support on volume, confirming that even oversold conditions can’t attract sufficient buying interest. This would expose the critical $115.55 monthly S1, where a breakdown would likely flush remaining long positions and potentially cascade toward the psychological $100 level. Watch for any new security incidents as potential catalysts for accelerated selling.
Given the oversold RSI, exhaustion-level ADX, and multiple support tests at current levels, the most probable near-term path sees SOL consolidating between $125-$140 while the market evaluates whether recent security improvements and bridge launches can offset reputational damage. Risk-conscious traders should note that any fresh security exploits could quickly invalidate bullish setups.
