Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Solana (SOL) is currently trading at $182, marking a 12.6% decline over the past 24 hours, as analysts warn of a potential significant downturn if key support levels fail. The cryptocurrency has struggled to maintain momentum, with several market observers pointing to bearish technical patterns, waning institutional interest, and a slowdown in derivatives activity as contributing factors to its precarious position.
Solana Faces Bearish Breakdown Amid Support Struggles
Solana’s price recently dipped below the crucial $180 support zone, aligning with a broader market pullback. After reaching a two-month low of $168 last week, SOL briefly showed signs of recovery, pushing towards the $210 resistance before failing to hold the $200 level on Friday.
Analyst “Crypto Bullet” suggested that Solana’s market structure indicates a possible 75% drop. According to his analysis, SOL completed a five-wave upward move when it peaked at $293 earlier this year, potentially signaling the end of a bull cycle and the beginning of an ABC correction pattern.
Analysts Project Mid-Term Decline to $40
Crypto Bullet further noted that SOL might have already entered the “C wave” of this correction, which could lead to substantial losses. He cautioned that Solana “looks cooked,” and even a short-term bounce to the $240-$250 range would likely be temporary before a deeper move down. His projection suggests Solana could decline towards the $40 range over the mid-term if key levels continue to break.
Echoing concerns, analyst Ted Pillows highlighted weakening support from institutional buyers. Pillows observed that “Solana treasury companies are in free fall right now,” indicating that the absence of institutional bids is making it increasingly difficult for SOL to sustain upward pressure.
Derivatives and Institutional Activity Show Weakness
Institutional trading activity across Solana-linked products has declined in recent weeks, coinciding with increased volatility in spot markets and reduced interest from large investors. This reduction in volume, coupled with a drop in open interest and funding rates in derivatives markets, suggests that traders are adopting a more cautious stance, which typically signals an uncertain trend and may impede strong short-term rallies.
Crucial Support Zone at $170–$180
Despite the bearish sentiment, some traders are monitoring critical support levels for a potential rebound. Analyst “Crypto Yapper” pointed out that Solana is currently testing the lower boundary of a two-month falling wedge. This wedge overlaps with a significant horizontal support zone between $170 and $180, a level that has proven crucial throughout the year.
Yapper indicated that if SOL manages to hold this support, it could trigger a 15% to 20% rebound, potentially pushing the price back towards the $210-$220 resistance range. Analyst “Man of Bitcoin” also identified a possible bullish 1-2 setup that could propel the price higher if buyers re-enter the market soon. However, both analysts emphasized that a definitive break below $170 could initiate further selling pressure.
Outlook Remains Mixed
The broader crypto market continues to exhibit uncertainty, with many altcoins undergoing corrections. Solana’s immediate future hinges on its ability to defend the $170-$180 support zone. Failure to hold this level would significantly increase the risk of further downside, while a successful defense and a reclaim of $200 could shift short-term sentiment.
