Solana at Risk: Analysts Warn of 30% Drop Below $100
Solana (SOL) experienced a significant 20% decline in early Q4, with analysts warning that the correction could continue, possibly pushing the price below the $100 psychological support level. SOL is currently trading around $156, hovering near a long-term ascending trendline critical to its medium-term uptrend. A break below this trendline may trigger further declines of 30-40%. On the technical side, key support levels remain vulnerable, while resistance around $200 is needed to reverse the downtrend. Despite the price drop, Solana's on-chain data reflects robust activity, with high transaction volumes, active addresses, and stablecoin capital inflows. However, the network's short-term recovery is tied to Bitcoin's performance. Institutional portfolios and market sentiment are also under pressure, but Solana maintains resilience and emphasizes its strong ecosystem fundamentals despite the bearish market conditions.
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Sudden Plunge in Solana Price
After a strong rally in early Q4, Solana (SOL) suddenly plunged, losing nearly 20% of its value in just a few sessions. This sharp decline dragged overall market sentiment into uncertainty. Although on-chain data confirms the robust activity of the Solana ecosystem, technical analysts warn that the current correction may not yet be over. SOL could fall below the psychological $100 level if the key support fails.
Technical Analysis: Potential for Further Decline
According to data from CoinGecko, Solana (SOL) is currently trading around $156, after touching a short-term low at $148. Since early November, SOL has lost nearly 20% of its market value.
The weekly chart indicates that the token hovers around the long-term ascending trendline established since 2023, which has been a key support for its medium-term uptrend. However, a prominent trader warned that a break below this trendline could lead to a 30-40% decline, possibly dragging SOL below the critical $100 psychological level.
“If this breaks, trust me there’s no magic. It’s a 30-40% slide straight into the next liquidity zone,” the analyst commented.
Another analysis noted $122 as a key high-risk, high-reward entry level, with $200 acting as critical resistance to confirm an end to the downtrend that started mid-2024.
Liquidity Analysis and Bitcoin's Impact
A liquidity heatmap for SOL/USD shared online indicates that price action recently swept below the $180 support zone, clearing downside liquidity clusters. Dense upside liquidity has formed around the $200-$220 range, but the analyst cautioned against premature optimism for a bullish reversal.
This viewpoint aligns with the broader consensus that any recovery for altcoins heavily depends on Bitcoin (BTC). The analyst stated:
"Until Bitcoin decides to form a bottom, Solana will go down."
BTC must stabilize above key supports near $95,000 for a sustained SOL rebound. The current fragile price structure below $150 suggests that deeper retests of $120 or even $100 remain plausible unless Bitcoin stabilizes.
On-Chain Metrics Highlight Strength
Despite the price correction, on-chain indicators reveal a robust performance for Solana. Key metrics include:
- Weekly blockspace value: $8.5 million
- DEX volume: $29 billion, surpassing Ethereum
- Transactions processed: 543 million
- Active addresses: 15.5 million, the most across all blockchains
These numbers counter the "Solana is dead" narrative and demonstrate solid real-world adoption. Stablecoin capital inflows have further strengthened, with Solana achieving a new all-time high for adjusted stablecoin volume in October, underpinning its significant utility in DeFi settlements.
Challenges for Institutional Investors
However, the sharp price drop has not spared institutional portfolios. Forward Industries, Inc. (Nasdaq: FORD), reportedly holds 6.82 million SOL, purchased at an average price of $232, translating to a 24% unrealized loss of roughly $382 million.
This showcases the dual nature of Solana’s situation: while fundamentals remain strong, short-term sentiment remains fragile and dependent on overarching market conditions, particularly Bitcoin’s stability.
The Road Ahead for Solana
While defending the $150-$160 range is critical to prevent a structural breakdown, Solana’s official X account urged the community to stay optimistic:
“Don’t be afraid of red candles. Red candles make community. Don’t be afraid of FUD. FUD creates community. Don’t be afraid of bear markets. The best successes come out of bear markets.”
This sentiment reflects a focus on long-term resilience and the belief that bear markets can forge stronger projects. Still, the short-term outlook is tied to Bitcoin regaining momentum above its major support zones.