SOL price is down today as a pronounced decline in Solana-based tokens and a bearish divergence from the RSI suggest that the downside is not over.
Solana’s native token, SOL SOL$231.45, is down 9% on Nov. 26 amid significant corrections across the broader cryptocurrency market.
Data from TradingView shows SOL trading down for the fourth day in a row at $230 after failing to enter into price discovery after hitting new all-time highs on Nov. 23.
Let’s look closer at the factors driving Solana price down today.
Marketwide sell-off weighs down SOL price
Solana corrects alongside other cryptocurrencies, which have also dropped, triggered by an overheated market and Bitcoin’s failure to tag the $100,000 mark.
Bitcoin BTC$93,337, the largest cryptocurrency by market capitalization, led the losses and has declined 5.8% over the last 24 hours to exchange hands at $92,536. Ether ETH$3,356.54 has dropped more than 1.2% over the last 24 hours to trade at $3,360.
Other top-cap cryptocurrencies, including BNB BNB$621.05, XRP XRP$1.37, and Dogecoin DOGE$0.3856, have also posted significant losses over the last 24 hours. Cardano ADA$0.9299 posted the largest daily gains among the top-cap cryptocurrencies, down 9.6% today.
Similarly, the total crypto market cap has dropped by 5% over the last 24 hours and 7% over the last two days to rest at $3.2 trillion at the time of publication.
“Bitcoin ultimately failed to break through the $100K resistance and corrected to $92.5K,” CryptoQuant independent analyst MAC_D said in response to today’s corrections in the crypto market.
“This correction occurred due to leverage overheating, as open interest and estimated leverage ratio reached annual highs.”
This will increase the chances of Bitcoin potentially reaching $100,000 and above over the coming weeks, pulling up altcoins along with it.
Solana-based tokens flash red
Solana’s bearishness on Nov. 26 coincides with an ongoing correction in the prices of tokens built on its network. Most are posting significant daily losses, as shown in the figure below.
Moreover, the overall market capitalization of all Solana-based tokens dropped from $347.8 billion on Nov. 25 to $228.8 on Nov. 26. The total trading volume increased by 43.2% over the same period, reinforcing the intensity of the sell-side activity.
Investors likely reacted negatively to the dropping value and market activity of tokens within the Solana ecosystem, resulting in the drop in SOL price.
SOL’s bearish divergence
SOL’s drop today precedes a period of growing bearish divergence between its price and the relative strength index (RSI).
SOL’s price rose between Nov. 8 and 26, forming higher highs. But, in the same period, its daily RSI descended, forming lower highs.
As a rule of technical analysis, a divergence between rising prices and a falling RSI indicates weakness in the prevailing uptrend, prompting traders to sell more at local highs.
The rise in SOL price to all-time highs also led to overbought conditions on Nov. 22 when the RSI hit 77, occasioning a correction as buyer exhaustion and profit-booking set in.
If the selling intensifies, SOL price may drop toward the $210 support level or lower to $185.
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