Solana (SOL) on Verge of Death Cross Amid Market Sell-off: Potential Scenarios

Solana (SOL) is approaching a critical technical juncture as it nears the formation of a "death cross," a pattern that often signals potential bearish momentum.

A death cross occurs when the 50-day simple moving average (SMA) of an asset's market price falls below the 200-day SMA. Right now, the Solana price's 50-day SMA, currently at $188.71, has turned downward, indicating a potential crossover with the 200-day SMA at $184.03 in the coming days.

The impending crossover indicates that short-term momentum, represented by the 50-day SMA, is underperforming the long-term average.

This development is significant, especially when sentiment is already sour, as on the cryptocurrency market.

Cryptocurrency prices extended their slide on Monday as diminishing prospects of further Federal Reserve rate cuts stoked a sell-off on the markets. Risk assets like crypto are under pressure; U.S. equities also slumped as investors sought refuge.

Potential scenarios ahead

Solana is on track to mark its fifth consecutive day of declines since March 6, reaching $120.35 in Monday's session, the lowest level since September 2024. At the time of writing, SOL has dropped 5.11% in the past hour, 9.11% in the last 24 hours to $121.12 and 23.10% weekly.

The last time Solana saw a death cross was in September 2024, which saw its price confirming a bottom before it began to rise. In the two months that followed, SOL reached highs of $264 after previously posting a golden cross.

Another possibility is that the formation of a death cross may cause SOL to decline. Key support levels to watch include $109 and $88. If Solana manages to hold above critical support levels, it could potentially attract buyers looking for value, leading to a price rebound.

On the other hand, if the SOL price has confirmed a bottom, it might consolidate a little while before its next major move.

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