Solana (SOL) is showing signs of weakening as it tests a critical support level, sparking concerns among traders and analysts about a potential 15% price drop in the near term. Over the past 24 hours, SOL has declined by 4.5%, making it the worst-performing asset among the top 10 cryptocurrencies by market capitalization today, according to CoinGecko data.
This downward movement raises questions about the sustainability of its recent bullish momentum. With key technical indicators flashing caution signals and on-chain metrics reflecting growing bearish sentiment, Solana’s short-term outlook appears increasingly uncertain.
Breaking Below the Bullish Channel
At the time of analysis, Solana was trading below the lower boundary of a key ascending channel—a pattern that had held steady since early April. This channel has served as a reliable trend guide, and its breach could mark a significant shift in market dynamics.
Currently, price action is testing the 21-day Exponential Moving Average (EMA)—represented by the orange line on most charts. This moving average has acted as dynamic support during previous pullbacks. Notably, the last time Solana closed daily candles below this EMA was at the very beginning of its current uptrend, underscoring its importance.
👉 Discover how real-time market analytics can help you stay ahead of key support breaks like this one.
If Solana manages to reclaim and hold above the 21-day EMA, a resumption of the bullish trend remains possible, potentially pushing prices higher in the coming weeks. However, failure to defend this zone increases the likelihood of a deeper correction.
A confirmed breakdown could lead to a retest of the $145 support level** (~€133), representing a decline of approximately **15% from current levels**. Should selling pressure intensify, the medium-term structure would turn bearish, opening the door for a drop toward the origin of the pattern near **$100 (~€92).
The 4-hour chart reinforces this downside risk. The 9-period EMA has crossed below the 21-period EMA, forming a bearish crossover—a classic signal of weakening momentum. This configuration often precedes extended corrective phases, especially when confirmed by other indicators.
Additionally, the Relative Strength Index (RSI) is currently below 50 but remains above the oversold threshold of 30. This suggests that sellers are in control, yet there is still room for further downside before reaching oversold conditions. In other words, the market may not be due for a bounce just yet.
On-Chain Data Reflects Growing Bearish Sentiment
Beyond technical charts, on-chain metrics are painting a similarly cautious picture. According to Coinglass, sell-side order volume exceeded buy-side volume by over $300 million (~€277 million) in the last 24 hours across major exchanges. This imbalance indicates strong distribution activity, with traders actively offloading holdings.
More concerning is the shift in behavior among large holders—commonly known as "whales." On Binance, the percentage of whale accounts opening long (bullish) positions on Solana futures has declined sharply. This retreat in confidence from influential market participants can amplify downward pressure, as whale movements often trigger cascading liquidations and panic selling.
When major players start reducing exposure, retail traders tend to follow—creating a feedback loop that accelerates price declines. With funding rates turning increasingly negative and open interest declining, the derivatives market is signaling reduced appetite for leveraged long positions.
These factors collectively suggest that market structure is deteriorating, increasing vulnerability to further downside volatility.
Solana’s Scalability Hopes: Enter Layer-2 Solutions
Despite near-term headwinds, long-term optimism around Solana’s ecosystem remains intact—driven by innovation aimed at improving scalability and user experience.
One promising development is the emergence of Solaxy (SOLX), Solana’s first dedicated Layer-2 solution. Designed to offload transaction processing from the mainnet, Solaxy aims to reduce congestion and lower fees while maintaining security through trust-minimized validation mechanisms.
By handling transactions off-chain and batching them for final settlement on Solana’s primary network, Layer-2 solutions like Solaxy can significantly enhance throughput—addressing one of Solana’s most persistent challenges during periods of high demand.
The project has already raised $40 million (~€37 million) in its private sale, reflecting strong investor interest in infrastructure upgrades that support sustainable growth.
While such innovations won’t immediately reverse short-term price trends, they strengthen Solana’s fundamental value proposition and could attract developer and institutional interest over time.
Frequently Asked Questions (FAQ)
Why is Solana dropping now?
Solana is experiencing downward pressure due to a combination of technical breakdowns—such as losing key support levels—and bearish on-chain activity, including increased selling volume and declining whale participation in long positions.
What happens if Solana breaks below $145?
A sustained break below $145 could trigger further selling, potentially leading to a test of the $100 level. This would represent a more structural bearish reversal rather than a temporary pullback.
Is Solana still a good long-term investment?
Many analysts believe so. Despite short-term volatility, Solana continues to innovate with faster transactions and lower costs than many competitors. The launch of Layer-2 solutions like Solaxy may improve scalability and attract more users over time.
How do EMAs help predict Solana’s price movement?
Exponential Moving Averages (EMAs) smooth out price data to identify trend direction. A crossover where the shorter-term EMA drops below the longer-term EMA—like the 9/21 EMA bearish cross—often signals weakening momentum and potential downside.
Can on-chain data predict crypto price drops?
Yes. Metrics like exchange flow, whale activity, and funding rates provide insights into market sentiment. For example, rising sell volume and declining long positions among large holders often precede price declines.
What role do whale movements play in Solana’s price?
Whales hold large amounts of SOL and their trading decisions can influence market direction. When whales reduce long exposure or increase selling, it often signals caution and can trigger broader sell-offs.
Final Outlook: Caution Amid Innovation
Solana stands at a pivotal juncture. While technical indicators and on-chain data point to growing risks of a 15% or deeper correction, the underlying ecosystem continues to evolve with promising upgrades like Solaxy enhancing its long-term viability.
Traders should monitor key levels closely:
- Immediate support: $145
- Critical breakdown level: $100
- Key resistance to watch: 21-day EMA and channel boundary
Investors are advised to practice sound risk management—especially in volatile conditions—and avoid overexposure to any single asset.