Solana continued to fall within a descending channel that has been developing since mid-July. The smart contracts token encountered a tough resistance at $28 which curtailed gains above the coveted $30 level.

Despite holding firmly to support established at $17.5, recovery has been elusive, especially due to the seller congestion at $20, coinciding with the descending channel’s upper boundary.

SOL is down nearly 3% on Wednesday to $18.97. If bulls don’t push for an immediate reversal, the down leg will stretch to test the channel’s lower boundary support around $17.

Solana Price Invalidates The Uptrend

Solana’s live price sits below three key moving averages on the daily chart; starting with the 50-day Exponential Moving Average (EMA) (red) at $20.23, the 100-day EMA (blue) at $20.74 and the 200-day EMA (purple) at $21.76.

This position reinforces the bearish grip while dampening recovery attempts. In other words, sentiment among traders remains negative and deprives the asset of the much-needed momentum to rally.

For instance, the Moving Average Convergence Divergence (MACD) indicator sent a buy signal around mid-September. Traders jumped on the call to buy SOL building momentum for the rebound from $17.5 but resistance at $20 in conjunction with the above moving averages killed the bullish outlook.

The descending channel will keep Solana in a downtrend unless bulls rally behind the smart contracts token and push aggressively above $20. Such a move would be the signal traders and investors sitting on the sidelines need to return to the market and keep the uptrend sustained for gains above $30.

The Relative Strength Index (RSI) has given up on the bid for recovery above the midline and is now dropping toward the oversold area suggesting that the downtrend is far from over. In that case, other key levels to watch keenly apart from the descending channel are the support areas at $16.5 and $14.5.

Solana Launches New DeFi Strategy

Solana has admitted that the network is facing difficulties in the competitive decentralized fiancé sector (DeFi) and believes its new strategy would help it regain its foothold and attract an extensive user base.

The first approach involves the introduction of points programs on various protocols within the ecosystem, including Cypher, MarginFi, Jito, and entrant. These points programs aim to reward and incentivize user contributions, thus encouraging participation in the Solana DeFi ecosystem.

Solana is also putting in a lot of effort to improve the Total Value Locked (TVL) in its ecosystem. Based on data by DefiLlama, the network’s TVL has soared in the past few weeks from $296 million to $312 million.

However, Solana is still facing more difficulties with the protocol’s decentralized exchange (DEX) volumes falling drastically. DEX volumes are key to the vitality of the DeFi protocol and determine Solana’s prospects in the sector.

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