After reaching a new multi-month low, Solana (SOL) is attempting to hold a key high-timeframe level as support ahead of week\u2019s end. Some analysts have suggested that the altcoin is poised to bounce, but others warned that a potential rally could be short-lived.<\/p>\n
On Friday, Solana recovered from the latest drop and surged 7.7% toward the $125 area. The cryptocurrency fell nearly 9% on Thursday afternoon amid a broader market correction<\/a>, sending its price to an eight-month low of $116.<\/p>\n Amid the pullback, SOL\u2019s price breached below a crucial high timeframe level, the around $120 mark, for the first time since April before recovering. Analyst Crypto Batman noted<\/a> the altcoin \u201cis not only at its major support level, the same one that has held price for the past 2 years.\u201d<\/p>\n In addition, the cryptocurrency is also forming a bullish divergence on the 3-day timeframe, \u201cexactly like what we saw before the major bottom\u201d at the start of Q2, the market observer added.<\/p>\n To him, this suggests that Solana could bottom soon and see the start of a recovery rally to the macro range highs. However, another market observer affirmed that even if a retest of the higher levels is likely, \u201ccontext matters here.\u201d<\/p>\n Analyst Crypto Scient highlighted that SOL\u2019s price is currently at the range lows of its multi-year range, recording the first retest of this area after being rejected from the range highs.<\/p>\n \u201cOne could argue SOL has been distributive for nearly two years now. That\u2019s fair,\u201d he explained, \u201c[but] range lows rarely break on the first attempt.\u201d Moreover, Scient pointed out that there\u2019s significant liquidity left between the $175\u2013$190 levels that \u201cshould get tagged at some point, even within a broader bearish environment.\u201d<\/p>\n As a result, the analyst considers that a \u201cmove higher to clean liquidity before any deeper downside would make far more sense.\u201d<\/p>\n Analyst Rekt Capital affirmed<\/a> that the $123 horizontal support remains the \u201cdefining level\u201d that Solana must hold to prevent a major breakdown to multi-year lows.<\/p>\n He detailed rebounds from this support have historically produced \u201coutsized upside expansions,\u201d with 140% and 100% moves. However, each rebound from this level has been progressively weaker over time, with the most recent bounce only managing to rally 15%.<\/p>\n This signals a \u201csharp deceleration in upside responsiveness at this level,\u201d which is important to consider as the compression in rebound magnitude<\/a> could affect SOL\u2019s monthly close.<\/p>\n According to the analysis, a monthly close above the macro support would keep Solana positioned for a weaker rally, but a close below $123 would substantially change the structure.<\/p>\n The second case would suggest that distribution has already started and confirm \u201chow much this support has weakened since the last meaningful rebound that produced a near 2x move earlier this year.\u201d<\/p>\nDecember Close To Define SOL\u2019s Fate?<\/h2>\n