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Highlights
- Solana price is facing resistance at the 50-day SMA level, and this might trigger a crash this week if buying pressure remains low.
- A looming $75 million long squeeze at $147 might hinder significant gains in the SOL price.
- Meme coin activity, tariff concerns and demand for SOL might impact how the price will perform this week.
Solana (SOL) faced choppy movements last week as much attention remained on Bitcoin (BTC), which is inching closer to all-time highs. As of July 8, Solana price was trading at $149 with a slight 1.2% drop. More volatility might be facing SOL this week amid a series of factors, including a bearish technical outlook suggesting that a downtrend is possible.
Things to Watch in Solana Price This Week
Some of the factors that traders should watch in the SOL price this week, which may influence its performance, include:
- Crucial resistance at the 50-day SMA that may prevent meaningful gains
- A looming long squeeze that could drive a bearish price correction
- A spike in meme coin activity that is likely to fuel volatility
- Trade tariff concerns that might trigger a risk-off attitude among traders
- SOL ETF approval prospects
Resistance Hurdle at the 50-day SMA
One of the factors that may prevent meaningful gains for the Solana price this week and potentially lead to the price crashing is the main resistance hurdle it faces at the 50-day SMA level of $154. SOL has been unable to cross this level for nearly one month now, and unless there is sufficient buying pressure to drive the price above it, the altcoin might continue facing weakness this week.
After facing rejection here, the price may drop to the lower support that lies at $130, and this might trigger a massive crash. Looking at the past trends, such a drop is likely as the SOL price tends to swiftly correct to the downside when the 50-day SMA level fails to hold.
Looming $75M Long Squeeze May Impact Solana Price
There is a massive long squeeze at $147 that might trigger a massive drop in the Solana price this week if bulls fail to defend the current levels. This bearish scenario is depicted in the liquidation map derived from Coinglass, showing that if Solana were to drop to this level, more than $75 million long positions would be at risk of being forcefully closed.
A long squeeze usually causes a bearish Solana price forecast because when such traders are forced to wind down their positions, they are forced to sell, and this ends up having a bearish impact.
Meme Coin Activity Surges as SOL Price Volatility Looms
Meme coin activity is on the rise, and this might also impact how the SOL price will perform this week. In the past, an increase in meme coin trading activity has often boded well for Solana because of the PumpFun launchpad.
Currently, meme coins are in the spotlight after Tesla CEO Elon Musk endorsed crypto assets after he formed a new political outfit. CoinGecko data shows that the market cap of Solana-based meme coins has increased by 3% to $11 billion, and as this continues, it might be bullish. However, if it declines, the SOL price will likely face a steep downtrend to the lower side.
Trade Tariff Concerns
There are also concerns about the ongoing trade tariffs, and this might end up having a negative impact not only on the Solana price but also on other crypto assets.
As CoinGape reported, 70% tariffs are about to go into effect, and they will target imports from countries such as Japan, Korea, and the European Union. Once this happens, the Solana price will risk losing its feat to get to the 50-day SMA level, and the $109 million long squeeze might happen.
Institutional Demand For SOL ETFs
Following the launch of the Rex Osprey Solana ETF last week, there has been a lot of interest from traders to understand how these products are going to perform and the demand that they have received from institutions. Per a CoinGape report, this SOL ETF amassed $33 million in volume during the first day and outperformed other crypto assets. If inflows continue into the second week when these products will be trading, the Solana price may extend its gains. However, if the demand falters, SOL may revert back and potentially crash.
To sum up, the price of Solana is at a crucial juncture this week as bulls aim for the 50-day SMA resistance level. With a lack of strong buying pressure, SOL will likely face rejection here and risk a $109 long squeeze that may trigger a massive crash. At the same time, tariff concerns and surging meme coin activity might cause volatility.
Frequently Asked Questions (FAQs)
1. Will the Solana price crash this week?
2. What factors will influence SOL performance?
3. What is the most crucial resistance for Solana?
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