Solana's Possibility of Hitting $67 Increases Amid US-Iran Conflict Escalation

▲ Solana (SOL)/AI generated image ©

Solana has been driven to the brink of collapsing below $80 amidst the shock of Middle East risks. As US-Iran tensions escalate and derivative market indicators rapidly deteriorate, the market is even discussing the possibility of a further decline to the $67 range.

According to investment media outlet FXStreet on May 28 (local time), Solana (SOL) continued its bearish trend, falling to around $80. The outlet analyzed that as the risk of military conflict between the US and Iran increased again, selling pressure spread across risk assets, and Solana was directly impacted.

The escalation of tensions was triggered by a retaliatory attack by Iran's Islamic Revolutionary Guard Corps (IRGC). According to Reuters, the IRGC launched an attack targeting a US airbase in response to a US attack near Bandar Abbas airport. The IRGC warned that it would take "more decisive action" if further attacks occurred. The market reflected the potential for an expanded Middle East risk, with Bitcoin falling below $73,000, and Solana also dropping to the $80 level.

Derivative market indicators also supported the bearish trend. According to CoinGlass, the SOL Long-to-Short Ratio fell to 0.81 on the day, marking its lowest level in the past month. This means that market participants are betting more heavily on the possibility of a decline than an increase. The Funding Rate also turned negative at -0.0012%, indicating a dominance of short positions.

The technical trend is also negative. SOL is currently trading below the 50-day Exponential Moving Average (EMA) of $86.73, the 100-day EMA of $91.70, and the 200-day EMA of $107.77. The Relative Strength Index (RSI) has fallen to around 35, approaching the oversold zone, and the Moving Average Convergence Divergence (MACD) continues a weak trend in the negative territory, maintaining a signal of selling dominance. The outlet analyzed that even if an attempt at a rebound occurs now, it is likely to be limited to a technical bounce.

The key market support level is $78.34. The outlet predicted that if this level breaks, the possibility of a further decline to the next major support area of $67.50 could open up. Conversely, for a short-term rebound, it explained that a recovery of the $86.67 Fibonacci retracement level and the 50-day EMA is first required. After that, the $97-$98 range is likely to act as the next key resistance level.

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