Solana (SOL) price is holding in the green unlike most of the cryptos that started pulling back on Thursday. The competitive smart contracts token, worth $13 billion in market capitalization and ranking #8, is up 2.8% in the last 24 hours to $31.89.

However, traders can no longer ignore the glaring signs of a larger pullback, especially if bulls fail to uphold support above $32. Besides, any signs of the uptrend weakening could encourage both short-term investors and traders to lock in the gains, thus closing their open positions—a move that could intensify the selling pressure and result in a 15% drop to $27.

Solana Price Uptrend Cools Off, What’s Next?

The Directional Movement Index (DMI) on the daily chart reveals that sellers are gaining control and fast. For that reason, bulls must move fast to safeguard the gains accrued since crypto prices started to move alongside Bitcoin price’s remarkable rally to $35,000 earlier this week.

Otherwise, Solana price is hanging on a loose thread likely to snap and send it tumbling below $30. Traders interested in shorting SOL are likely to consider selling against USD with the blue +DI line falling while the red -DI line rises.

Such action would imply that bears have more control and might trigger a sell-off with Solana price plunging 15% from the prevailing market value at $27 — a local support area reinforced by the 21-day Exponential Moving Average (EMA).

The general outlook of the crypto market is not as strong as it was last week, not even a few days ago. Traders would be making cautious decisions this weekend and SOL could head either way—up or down.

Movement above immediate resistance at $32 will serve as confirmation that bulls have the reins and preserve the positive investor sentiment for the uptrend’s continuation targeting $40. On the other hand, declines could surge below $30 at the earliest sign of weakness, as investors would want to avoid a fresh round of capitulations.

 Nonetheless, this is not the end of the road for the bulls as they may have plenty of opportunities to redeem themselves, considering the golden cross patterns on the daily chart.

These technical outlays occur with short-term moving averages flipping above long-term ones. In Solana’s case, the 21-day EMA confirmed the first golden cross pattern around mid-October while the 100-day EMA has just flipped above the 200-day EMA implying that the path with the least resistance remains to the upside.

Meanwhile, Defi Llama, a leading platform tracking the decentralized finance (DeFi) market, shows a noticeable climb in Solana’s total value locked (TVL) to $378 million from 2023’s lowest TVL of $210 million.

TVL is a measure of the dollar value of digital assets locked in smart contracts within the Solana ecosystem. Increasing TVL is often viewed as a positive sign for the network and the token. It shows that investors are confident in the future of the protocol, at the same time, it reduces the available supply and subsequently, the potential selling pressure.

Therefore, if investors continue to drive assets into smart contracts, there’s a higher probability of Solana price upholding the rally.

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