- Solana trades at $172, struggling below $200 resistance, with analysts warning of a potential drop to $125.
- On-chain transactions fell 28% to $2.61B, while network activity plunged 55%, signaling weak investor confidence.
- March unlock of $1.6B SOL and 11.2M FTX-linked SOL add selling pressure, deepening bearish sentiment.
Solana (SOL) continues its downward trajectory, with analysts warning of a possible decline to $125 if key support levels fail. Once traded above $250, the cryptocurrency struggles under sustained selling pressure. Market expert best_analysts has highlighted the $200 resistance level as a major rejection zone, reinforcing bearish sentiment.
On Wednesday, Solana stabilized around $170, attempting to halt its 15% decline over four consecutive days of losses. However, declining transaction volumes indicate traders are hesitant to enter large positions. Meanwhile, investors have shifted focus to other assets following the U.S. SEC’s acknowledgment of CoinShares’ Litecoin (LTC) and XRP ETFs, leaving SOL in a weaker market position.
Solana trades at $172 and remains within a descending channel, indicating continued weakness. Analysts caution that if Solana fails to hold its $150-$155 support range, the asset could test the historically significant support level of $125-$130 zone.
Technical Indicators Signal Continued Weakness
Several technical indicators suggest that Solana may experience further declines. The Relative Strength Index (RSI) sits at 30.48, nearing oversold conditions, while the Money Flow Index (MFI) at 37.61 signals weak capital inflows. Additionally, the Moving Average Convergence Divergence (MACD) has crossed into negative territory, confirming bearish momentum.
Despite these bearish signals, some traders see the potential for a reversal. A divergence in the 4-hour RSI, where SOL’s price makes lower lows while RSI forms higher lows, hints at weakening selling pressure. If SOL breaks above the $173 resistance level, it could initiate a recovery, with major resistance targets at $195.81 and $216.90.
Solana’s strong technological advancements in 2024, such as the Firedancer validator client and the upcoming Token-22 update, have yet to translate into price stability. Analysts remain cautious, particularly with the impending March release of $1.6 billion worth of SOL, which could exacerbate selling pressure amid market weakness.
Solana On-Chain Transactions Drop 28%
Solana’s decentralized exchange (DEX) trading volume has dropped to a five-week low of $2.61 billion, reflecting a 28% decline in on-chain transactions. This downturn aligns with a broader market unease that has seen SOL lose 14% in February. Historically, large SOL inflows into exchanges signal significant price shifts, and the latest data indicates substantial withdrawals, suggesting imminent sell-offs.
Furthermore, network activity has declined by 55%, driven by decreased active addresses. Investor confidence has also been shaken by three major scams $LIBRA, $TRUMP, and $Millenia rug pulls adding to security concerns. With 11.2 million SOL set for release from FTX’s bankruptcy proceedings, investors brace for further price declines in the near term.
Read More: Will Solana Hold $166 and Reclaim $185? Key Levels to Watch