The cryptocurrency Solana demonstrated a sharp intraday increase after significant losses recorded earlier in the week. The asset's value recovered amid the overall strengthening of the crypto market, whose capitalization increased by nearly $200 billion.
Aggressive buying on the dip helped prevent further decline. As a result, the asset's price gained 12% over the day, despite ongoing market uncertainty.
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Sentiments of long-term investors and on-chain signals
Blockchain statistics indicate a decrease in purchasing activity among long-term investors. The HODLer Net Position Change indicator shows a downward trend. This indicates a slowdown in accumulation rates from participants who typically provide support for quotes during correction periods. The sharp price drop last week likely weakened the confidence of major players.
Sustainable recovery directly depends on the resumption of activity among long-term investors. If buying rates remain low, the asset may face difficulties in attempting to form a reliable upward trend. Declining demand in this group limits the absorption of excess supply. This increases the likelihood that the current growth will be short-term without the participation of major market players.
Market momentum indicators suggest that selling pressure is nearing exhaustion. The Money Flow Index (MFI) has approached the oversold zone below the 20.0 mark. Entering this range is traditionally considered a signal of market saturation with sales. Typically, such a state is followed by a stabilization phase or a technical bounce in quotes.
Over the past two and a half years, Solana has been in the oversold zone only three times. In each case, this led to noticeable stabilization or trend reversal. Further declines in the indicator may help halt the fall and attract additional buyer interest.
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Technical analysis and SOL price forecast
At the time of preparing this material, the asset's price is near $88. Earlier in the trading session, there was a decrease of about 13%, but active demand prevented the price from settling at low levels. Holding positions above local minima confirms the interest in purchases near current values.
Support from the overall market may contribute to price growth above $90 in the short term. For a full trend recovery, the price must return to the level of $100 and hold above it. Successfully overcoming this mark will confirm the strengthening of market momentum. In this case, the target for upward movement will be the range of $110.
However, the risks of a renewed decline remain. If long-term holders continue to reduce positions, the growth potential will be limited. Failure to overcome the barrier at $100 may lead to price consolidation around $90. In the event of a negative scenario, a return to the support level of $78 is possible. Such movement would negate current bullish expectations and extend the asset's correction phase.