Solana’s (SOL) Crucial Support Didn’t Hold After Outage, Cardano (ADA) Loses Lifeline Support, Avalanche (AVAX) Recovery Problematic

Solana has recently faced a challenging period as crucial support levels have failed to hold. Despite its technological promise, Solana’s ecosystem has been grappling with dwindling traction, as evidenced by a slowdown in new meme coin deployments and a noticeable decline in DeFi volume.

The technical chart for SOL paints a sobering picture. The price has recently breached important support at the $95 level, marking a clear deviation from its once robust uptrend. This level was seen as a stronghold for bulls, but the failure to maintain it has led to concerns over the potential for further downside movement.

A key factor in the current scenario is the lack of enthusiasm in the NFT sector within Solana’s ecosystem and the most recent outage. While many anticipated that NFTs would be a driving force for Solana, mirroring the explosive interest seen in 2021, the reality has been less than stellar. Investor interest in non-fungible tokens has cooled significantly, and the issues plaguing the Solana network, including outages and technical setbacks, have not helped in maintaining investor confidence.

Looking at the specifics, the next notable support level for Solana lies around the $76.50 mark, which aligns with the 100-day EMA. Should this level fail to provide a bounce back, the next area of interest could be near the $60.82 level, close to the 200-day SMA — a critical long-term indicator.

Cardano in choppy waters

Cardano has slid below the critical $0.5 threshold, a psychological support level that often plays a key role in investor sentiment. This descent marks a significant bearish development for ADA, raising concerns about its short-term trajectory.

From a technical perspective, Cardano’s next line of defense lies with the 100-day EMA. This indicator is closely watched by technical analysts and traders, as it serves as a dynamic level that can offer support or resistance depending on price action. With Cardano trading below the $0.5 level, this 100 EMA could be the next crucial support to prevent further decline.

However, the situation is not entirely grim. The descending volume accompanying the price drop could suggest that the bearish rally might be losing steam. In technical analysis, declining volume during downward price movement can sometimes indicate a lack of conviction among sellers, which could precede a stabilization in price or even a reversal if buyers step in with sufficient force.

If the asset manages to find solid footing at the 100 EMA and volume begins to pick up, we could see a cessation of the bearish pressure and perhaps a reversal. However, a failure to hold the 100 EMA could lead to further losses, with the next support level potentially being the 200-day EMA.

Avalanche’s recovery

Avalanche, once lauded as a leading alternative L1 network, faces a precarious path on the road to recovery. Recent price movements have cast a shadow over its momentum, with AVAX experiencing a concerning drop below the 26-day EMA, signaling potential further declines.

The breach of the 26 EMA is particularly troubling as it often serves as a crucial short-term momentum indicator. Currently, the price action suggests a trajectory toward the 100-day EMA, which sits approximately 11% below the current price level. This would not only represent a significant retracement but could also undermine investor confidence, potentially leading to a bearish outlook for the asset.

The number of large transactions and total volume is not displaying the kind of robust activity that characterizes a thriving ecosystem. 

Avalanche’s immediate support levels lie around the $30.20 mark, with resistance forming near the $34.61 region. For AVAX to invalidate the bearish scenario, it would need to reclaim its position above the 26 EMA and demonstrate a significant increase in on-chain activity and transaction volume.

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Arman Shirinyan