Solana is facing renewed selling pressure after dropping more than 7% earlier this week, as geopolitical tensions and macro uncertainty continue to weigh on risk assets. Technical signals now suggest the token could be vulnerable to further downside.
With weakening on-chain fundamentals and fading derivatives activity, traders are questioning whether Solana’s bearish flag pattern could trigger another leg lower.
Solana Extends Downtrend Amid Market Uncertainty
Solana fell from $88.05 on Sunday to an intraday low of $81.86 on March 2, marking a sharp daily decline. Although the token later attempted to reclaim the $90 resistance level during a brief market-wide recovery, the rally stalled just below that threshold.
Zooming out, Solana is down more than 30% over the past month and roughly 44% from its yearly highs. The broader trend remains firmly bearish.
The decline comes as investors shift away from risk assets amid escalating U.S.-Iran tensions, which have triggered volatility across global markets. Rising oil prices and inflation concerns are fueling speculation that the Federal Reserve could maintain a hawkish stance for longer, a scenario that typically pressures high-beta assets like Solana.
Network Revenue and TVL Continue to Slide
Beyond macro factors, Solana’s on-chain metrics are also showing signs of weakness.
According to DeFiLlama data, weekly network revenue has fallen more than 30% from its mid-January levels. Total value locked (TVL) on the network has also dropped significantly, declining from over $9 billion on Jan. 17 to around $6.64 billion at the time of writing.
These declines suggest cooling activity across the ecosystem. Some analysts believe the memecoin-driven surge that previously boosted Solana’s growth may be losing momentum.
When network revenue and TVL contract simultaneously, it often signals reduced demand and weaker user engagement, both of which can weigh on price performance.
Derivatives Market Shows Reduced Conviction
Derivatives data further reinforces the cautious outlook.
CoinGlass figures show that Solana futures open interest has dropped nearly 45%, falling to $4.93 billion from January’s high of $8.88 billion. This sharp reduction indicates traders are unwinding leveraged positions and waiting for clearer signals.
Falling open interest during a downtrend often reflects declining speculative appetite and uncertainty about near-term direction.
Technical Analysis: Bearish Flag Points to More Downside
On the daily chart, Solana has formed a bearish flag pattern. This structure typically appears after a strong downward move, followed by a brief consolidation phase. Historically, bearish flags often resolve with another breakout to the downside.
Additional indicators support the bearish case. The Supertrend indicator has turned red, signaling continued downward momentum. Meanwhile, the Aroon indicator shows Aroon Down at 50%, highlighting sustained selling pressure.
If the bearish momentum persists, Solana could revisit the February 6 low near $70. A break below that level may intensify downside pressure.
What Could Invalidate the Bearish Setup?
Despite the negative signals, the bearish outlook is not guaranteed.
A decisive break above the $90 resistance level would challenge the current pattern. Solana has struggled to close above this area multiple times in recent weeks. If buyers manage to reclaim and hold above $90, the next target could be the psychological $100 level.
Improved macro conditions, easing geopolitical tensions, or renewed ecosystem activity could also shift sentiment.
For now, however, technical and fundamental signals suggest Solana remains under pressure.
