Solana (SOL), the sixth-largest cryptocurrency by market capitalization, is showing signs of vulnerability as technical and fundamental indicators point toward a potential price correction. The digital asset was trading at around $140 on Thursday, falling over 50% from its 2024 peak and struggling to maintain momentum after hitting resistance at $146.9.
Price Stalls Amid Broader Market Volatility
Solana’s recent rally, which had sparked hope of a sustained recovery, came to a halt this week after macroeconomic news rattled investor confidence. Former U.S. President Donald Trump’s announcement of sweeping tariffs on the automobile sector introduced fresh uncertainty into global markets, sparking fears of an economic slowdown.
Market analysts warn that Trump’s proposed “Liberation Day” tariffs could lead to a U.S. recession, a sentiment that caused a broad sell-off in risk assets—including Bitcoin, altcoins, and equities. Solana was not spared from the downturn.
Meme Coin Collapse Adds to Ecosystem Strain
Solana has also been under pressure due to internal weaknesses within its ecosystem. The rapid collapse of several Solana-based meme coins, largely attributed to insider exits, has shaken retail investor confidence. The resulting decline has impacted both the activity on Solana’s decentralized exchanges (DeX) and the network’s overall fee generation.
Data from DeFi Llama shows that Solana DeX platforms processed just $8.7 billion in trading volume over the past seven days—a figure far below the volume seen on Ethereum or BSC Chain.
Still, there are small signs of optimism. Some meme coins have shown modest rebounds. Bonk rose 20% in the last week, while others like Popcat, Fartcoin, Book of Meme, Gigachad, and Cat in a Dog’s World have posted gains of over 10%.
Technical Analysis Signals Possible Breakdown
From a technical perspective, Solana’s price action is flashing bearish warning signs:
- On February 25, the token formed a death cross pattern—when the 50-day moving average drops below the 200-day moving average—typically a strong indicator of extended downside pressure.
- In the days since, SOL has been consolidating in a bearish flag pattern, characterized by a sharp drop followed by a narrow upward channel or sideways movement.
This pattern suggests a continuation of the downtrend, with the key support at $120 now in sharp focus. This level has held multiple times since April last year. A confirmed breakdown below it could pave the way for a further decline toward $100, marking a potential 30% drop from current prices.
Key Levels to Watch
- Bearish Confirmation: Breakdown below $120 support zone
- Next Target: $100 – a critical psychological and technical support
- Invalidation of Bearish Outlook: A move above $170, which was the swing low from January 25, would neutralize the bearish setup
Solana’s price remains under pressure amid macroeconomic headwinds, internal ecosystem challenges, and concerning chart patterns. While there are glimpses of recovery within the meme coin segment, broader market uncertainty and technical breakdown risks could weigh heavily on SOL’s short-term outlook. Traders and investors should keep a close eye on the $120 support level and the $170 resistance, which will likely define the token’s next major move.
