SOL: Examining Signs of Slowdown Amidst a Downtrend and Surrounding Conditions

Solana (SOL) maintains a bearish structure characterized by lower highs and lower lows, but there are signs of decelerating downward pressure in the short term. While the 4-hour timeframe still shows a clear downtrend, the 1-hour trading volume remains at about half its usual level, suggesting that the selling momentum has somewhat subsided. A divergence warning has appeared where the secondary indicator's lows are rising despite the price hitting lower lows, and we are seeing a short-term reaction as the closing price rises above the daily Volume Weighted Average Price (VWAP). However, this slowing momentum only warns that the speed of the decline has decreased; it does not signal a change in the trend itself. Until a structural breakout above the previous high is confirmed, it is best to view this calmly as a brief pause within the existing downtrend.

Confirmed Indicators and Momentum Movements

While the larger trend continues to show lower highs and lower lows, we have spotted signs of decelerating selling pressure in the short term. First, the closing price has reclaimed the daily VWAP, and the negative range of the MACD histogram is narrowing, indicating a gradual loss of bearish momentum. Additionally, we observed a divergence where the RSI indicator's lows are rising while the price lows are moving lower. However, these improvements in momentum indicators and the divergence serve only as an early warning that the decline has hit a temporary hurdle, not as a sign of a trend reversal. Until the price clears the previous swing high or a clear support-and-rebound structure is established, we should continue to treat this as a temporary pause within the ongoing downtrend.

If the price closes above 90.3900, there is a possibility for the upside momentum to continue. Conversely, if the price closes below 88.7300, the short-term support will break, potentially leading to a corrective phase.

Market Environment and Recent News

Looking at the external environment, the broader cryptocurrency market is characterized by liquidity contraction and a cautious "wait-and-see" stance. Institutional demand has cooled due to large outflows from US spot Bitcoin ETFs, and there is no clear buying interest across the altcoin market. Furthermore, external factors such as stagnant inflows into Solana spot ETFs and the cancellation of the Shanghai event are weighing on market sentiment. While there has been news of self-remediation within the ecosystem—such as a lending protocol resuming deposit and withdrawal functions after technical issues—this does not yet seem sufficient to revive overall market vitality. In a situation with many mixed variables, it is better to calmly observe whether the overall trading atmosphere actually turns around, rather than concluding that any single piece of news is the sole cause of price action.

The Need for a Calm Perspective

The fact that the closing price has moved above the daily VWAP and bearish momentum has slowed can be read as a short-term pause. However, this divergence signal is merely a warning that the speed of the decline has slowed; it is not definitive proof that the trend itself has turned upward. On a larger scale, the downtrend with its lower highs and lower lows remains intact, and the continued capital outflows and widespread caution in the crypto market are still significant burdens. Instead of prematurely declaring a bottom based on this short-term recovery in position, we need to calmly wait to see if price action emerges that effectively breaks the existing downtrend.