Solana (SOL) Finds Early Support after a Network Freeze Driven Slump

Key Insights:

• On Saturday, Solana (SOL) tumbled by 9.88% as investors reacted to the news of a network blackout.
• Bearish sentiment from the broader crypto market added to the downside before finding early support this morning.
• Technical indicators are bearish, with SOL sitting below the 50-day EMA.

Solana (SOL) tumbled by 9.88% on Saturday. Following a 4.88% fall on Friday, SOL ended the day at $84.65.

While broader crypto market sentiment contributed to Saturday’s loss, network news updates also weighed heavily.

The month-end sell-off continued a bearish trend that kicked in on April 3.

A bullish start to April was short-lived. After hitting a month high of $143.54 on April 02, SOL slumped to an April low of $82.03 on Saturday.

SOL ended April down 31.1%, reversing a 23.2% gain from March,

A 7-Hour Solana Network Freeze Sinks SOL

This morning, news hit the wires of bots hitting Solana’s NFT minting tool named Candy Machine on Saturday.

According to the report, “inbound traffic amounted to four million transaction requests and 100 gigabits of data every second.”

The Bots were reportedly able to push validators out of consensus, leading to a seven-hour network freeze.

Validators were able to restore the network late on Saturday, though core developers have yet to identify how bots evaded safeguard measures.

SOL Price Action

At the time of writing, Solana was up 5.12% to $88.98. A mixed start to the day saw SOL fall to an early morning low of $84.17 before striking a high of $89.89.

Technical Indicators

SOL will need to avoid the $87.19 pivot to make a move through the First Major Resistance Level at $92.39.

Broader market sentiment would need to improve to support a return to $90.

In the event of an extended rally, SOL should test the Second Major Resistance Level at $100.09. The Third Major Resistance Level sits at $113.00.

A fall through the pivot would bring the First Major Support Level at $79.44 into play. Barring another extended sell-off throughout the day, Solana should avoid sub-$79. The Second Major Support Level sits at $74.31.

The EMAs and the 4-hourly candlestick chart (below) send a bearish signal. Following three consecutive sessions in the red, SOL sits below the 50-day EMA, currently at $96.97. This morning, the 50-day EMA pulled back from the 100-day EMA. The 100-day EMA also pulled back from the 200-day EMA, a bearish signal.

A move through the 50-day EMA would bring $100 into play.