Solana price extended its decline on Wednesday, staying on a descending channel that goes back nearly a month ago. SOL traded at $217 at the time of writing, down by 2.6% on the day. The coin has dropped by about 17% from its record highs recorded 25 days ago, and has lost 8.4% of its value in the last month. This has resulted in a bearish momentum, adding downward pressure on the price.
ETF rejection pressures Solana price
Solana’s gains in November were partly driven by the positive sentiment surrounding its spot ETF applications. However, it was widely reported in early December that the Securities and Exchange Commission (SEC) had written to prospective issuers informing them of the rejection. Apparently, the market regulator is waiting for a new administration to take over before approving more ETFs.
The delay in approvals has cast a shadow on Solana price upside amid profit taking by early investors. However, Solana’s growing ecosystem still presents a strong growth proposition. That will provide support for the price in the medium term.
Liquidation data
The crypto market has experienced rising liquidations in the four hours leading to this writing, signaling declining investor confidence. According to Coinglass data, $280.56k worth of Solana were liquidated in that time frame, with the vast majority, $241.23k being short liquidations. That could strengthen the downward momentum on Solana price if the trend continues.
Solana price prediction
Solana price pivots at $220 and the downside will prevail if resistance persists at that level. The downward momentum is likely to find initial support at $215, but an extended control by the sellers could break below that level and test the second support at $209.
On the other hand, moving above $220 will shift the momentum to the upside. With the buyers in control, the price will likely encounter the first barrier at $225. Furthermore, the downside narrative will be invalid if the price goes above that level. Meanwhile, the momentum could extend gains and test the second resistance at $230.
