Solana (SOL), the popular altcoin, has experienced a significant decline in its price recently, causing a shift in sentiment towards the negative zone. Traders in the derivatives market have increasingly started betting against a price hike, reflecting the overall bearish trends surrounding SOL.

Technical indicators suggest the possibility of surprises for traders holding short positions if SOL's price moves unexpectedly. A closer analysis of SOL's price action on the daily timeframe chart reveals that it is currently trading around $139.37, which is near the critical 0% Fibonacci retracement level. SOL remains below its long and short-term moving averages, acting as resistance around $149.29 and $153.87, respectively.

Several technical indicators indicate a bearish trend for SOL. The Relative Strength Index (RSI) stands at 41.43, indicating weak momentum and proximity to the oversold territory. The Moving Average Convergence Divergence (MACD) line and the signal line both have negative values, further reinforcing SOL's prevailing downtrend.

The next move for SOL is crucial, as it faces important support and resistance levels. If the decline persists, the first major support level is expected to be at the 23.6% Fibonacci retracement level, approximately $128.88. Failure to hold this support could lead to a further drop towards the 50.0% Fibonacci retracement level at $116.79.

However, if SOL finds support around its current level or near $128.88 and the RSI begins to turn upwards, it could indicate the start of a recovery. In this scenario, SOL may attempt to retest its resistance levels, particularly the short and long-term moving averages acting as hurdles at $149.29 and $153.87, respectively. Breaking above these moving averages would be crucial for a potential bullish reversal.

For a full bullish recovery, SOL must aim to break above the significant 100% Fibonacci retracement level at $185.51. This level holds the key to stronger bullish momentum and a potential upward trend for SOL.

The recent drop in Solana's price is not attributed to any specific developments within the Solana network. Rather, it is a reaction to the broader market movement. The cryptocurrency market as a whole has experienced a significant downturn over the past week, resulting in substantial losses in market capitalization. Solana, like other major assets such as Bitcoin and Ethereum, has been affected by this market-wide sell-off.

Additionally, analysis of Solana's funding rate on Coinglass reveals a weakening of positive sentiment in recent weeks. While buyers had previously dominated the market, the overall trading volume has been relatively weak. The funding rate, currently below zero at approximately -0.0075%, indicates a shift towards sellers dominating the market. The growing number of traders betting on a further decline in SOL's price contributes to the bearish sentiment.

However, it is essential to consider the potential risks associated with this bearish sentiment. If SOL's price unexpectedly moves upwards, traders holding short positions may face significant liquidations. Such a scenario could trigger a sharp reversal in the market, potentially leading to a change in sentiment and a bullish recovery for SOL.

As market conditions remain uncertain, traders and investors will closely monitor SOL's price movements and key support and resistance levels to anticipate the altcoin's next move.

Disclaimer: The information provided does not constitute financial advice. Readers are advised to do their own research and analysis before making any investment decisions.