- Solana briefly dropped below $125 support but bounced strongly, ending the week up by 7.81%
- The price action is seen as a bear trap, shaking out positions before reversing back above the crucial level.
- Resistance near the $190–$200 range remains untested, with broader market strength needed for further upside.
Solana (SOL) has recovered above the $125 support level after briefly falling below it, reversing course to close the week in positive territory. The cryptocurrency had been holding this range since late 2023 before a sudden drop raised concerns of a deeper decline.
The price dropped below the established support, signaling a potential bearish trend. This movement triggered liquidations and created uncertainty in the market. However, Solana quickly reversed, reclaiming the lost level and finishing the week with a 7.81% gain. The bounce has now positioned SOL above the same support level it recently lost, neutralizing the breakdown concerns.
Market Interprets Move as Bear Trap
Analysts and traders have identified the move as a potential bear trap. The breakdown wiped out leveraged positions before the rapid reversal. Despite criticism of Solana from some market watchers, including well-followed trader DonAlt, the recovery has been acknowledged as significant. He analyzed the movement as a potential false breakdown, indicating potentially strong market conditions in confused situations.
The short-term market conditions now remain stable, yet the resistance area from $190 to $200 continues to deter upward price movements. The difficult area where the previous breakdown occurred remains substantially challenging for this zone. Higher price levels within this specific band will only occur when cryptocurrencies show strength throughout the market.
Overall Market Conditions Still Uncertain
The recent price rally did not change the defensive approach investors maintain toward the market as a whole. General economic factors produce continued negative effects on risk investment behaviors.
External pressures maintain resistance against recovery attempts until they stop affecting the market. Solana demonstrates ongoing buying demand because it rebounds at critical points.
