Solana Stalls at $90 Again. Will There Still be a Short Squeeze to $95?

Solana surged to a high of $89.4 on Wednesday. The bullish sentiment across the crypto market spread to the altcoin, resulting in the hike.

It traded up by almost 4% at its peak. However, it’s edging closer to erasing its previous gains as it approaches its opening price. In hindsight, the altcoin experienced notable selling pressure near $90, leading to the current retracement.

Nonetheless, the latest hike is no surprise as a recent outlook noted that the asset bounced off a critical support and may attempt the previous week’s high.

While it hasn’t tested the barrier, this isn’t the first time SOL has stalled around $90. Last week, it flipped the mark twice but failed to sustain an uptick above it. It stalled at $90.8 on Friday, indicating strong selling congestion.

The latest rejection suggests that the bears are currently extending the sell zone. It remains to be seen if the bulls can push prices close to this key level within the next seven days.

However, current onchain data suggest a slim chance of that happening. Since the start of April, the total locked value has declined. As of Apr 1, TVL was 76.32 million SOL. It retraced to the next day, hitting a low of 66.14 million units. It has retraced even further and is now at 64.1 million SOL at the time of writing.

The constant withdrawal from the SOL TVL suggests a growing bearish sentiment among traders. It is also reflected in prices, as the sell zone has widened over the last seven days.

Aside from the total locked value, the cumulative volume data has been declining since late March. Meanwhile, prices mostly rose during this period. This means that even as prices increase, the bears remain highly active.

Solana Funding Rates Flip Positive

Solana’s funding rate flipped positive on Sunday after three days of negative readings. While this may be seen as a positive development, it also suggests that the bulls are growing confident. As a result, they are opening more longs.

The chances of a long squeeze increase following this shift. If it happens on Friday, prices will rapidly decline. It could also indicate another bearish weekend for the altcoin.

Based on the 1-day chart, Solana will retrace even further in the coming days. Previous price movements, a drop to $83 is likely. Prices have rebounded around this mark three times in the last seven days, suggesting a growing concentration of demand. However, if the bulls fail to defend the barrier, the asset will retest $80 next.

Additionally, the moving average convergence divergence is currently undecided. The gap between the 12- and 26-EMAs narrowed a few days ago as the shorter-term EMA plummeted. It halted its decline, hinting at further price increases ahead.

However, its histogram prints shorter bars amid the trend reversal. This means the bearish convergence will resume, and prices will decline.

In summary, onchain and price chart indicators suggest further declines in the coming days. It may kick off on Thursday and span the rest of April.

In other news, Seeker (SKR), the native token tied to Solana Mobile’s latest Web3 smartphone, is currently seeing large-scale sell-offs from whale investors. It remains to be seen how it will affect SOL.

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