Unveiling Why Solana (SOL) May Continue Its Downward Spiral

Bearish Momentum for SOL ?

The price surge of Solana appears to be taking a pause. Despite impressive gains of over 22% last month, the trend has significantly cooled in recent days. The token has fallen nearly 6%, now trading around $180, well below its recent highs.

While this could simply be a healthy pullback, certain on-chain and sentiment indicators suggest this correction might last longer than expected. Let’s analyze the situation.

Bearish Signals in On-Chain Data

One of the main signs of a potentially prolonged downtrend comes from the SOPR, or “Spent Output Profit Ratio.” This indicator tracks whether SOL holders are realizing profits or losses when selling.

Solana’s SOPR has dropped from 1.04 to nearly 1.00 over the past week. This means wallets that are currently selling are hardly making any profit. In other words, fewer investors are cashing in gains, which often signals the beginning of waning confidence in the market. This phenomenon is particularly concerning as the SOPR is declining alongside prices.

Liquidation data confirms this weakness. Over the last 7 days, short positions on Solana total $1.28 billion, compared to only $924 million for long positions. Traders are therefore betting heavily on a continued short-term decline.

Will Solana Bounce Back ?

Another concerning indicator is the relative strength index between buyers and sellers (Bull-Bear Power Index). This tool, which measures the respective power of both camps, is continuously declining. It shows that buyers are progressively losing control as the correction deepens.

A weakening bullish momentum means that dip-buying is becoming less aggressive, limiting the chances of a quick rebound. Without a new wave of enthusiastic buying, prices could remain flat or continue to erode before an eventual recovery.

On the other hand, numerous shorts are positioned for liquidation to the north. While the dominance of shorts indicates bearish sentiment, smart money could push the price higher after forcing investors to capitulate.

Key Technical Levels : $173 as Critical Support

From a technical perspective, Solana has retreated from its recent high of $206 to hover around $180. Applying a Fibonacci retracement from the low at $125 to the peak at $206, the crucial support level to watch sits between $173 and $175. This represents a classic 38.2% retracement zone, generally considered a first “serious” support in a healthy uptrend.

If Solana manages to hold above this threshold, it could stabilize within a range before attempting a new upward phase. But a break below $173 would pave the way for a deeper correction, confirming the bearish signals observed in the SOPR, liquidations, and waning bullish momentum.

Solana could therefore return to $167 if this zone isn’t maintained. Nevertheless, the negative 4-hour CMF could indicate that selling pressure is about to fade. To confirm this trend reversal, SOL will need to break through resistances at $186 and $191 subsequently.

In summary, Solana’s price has dropped 6% this week, with a declining SOPR and significantly increasing bearish bets. While the long-term bullish trend isn’t necessarily in question, these indicators suggest a possible continuation of the short-term correction. The key level of $175 will be decisive for the future price direction.

How to Buy Solana on Bitget ?

SOL nonetheless remains bullish in the long term. To invest in this promising blockchain, here’s a guide to easily obtain the token on Bitget :

1. Sign up on Bitget : Create an account on Bitget via the official website or mobile app. Provide an email address or phone number, then complete identity verification (KYC) to access all features.
2. Deposit funds : Once your account is activated, deposit funds in fiat currency (EUR, USD, etc.) via bank transfer or card, or transfer cryptocurrencies from another wallet.
3. Access the Solana market : Go to the trading section and select the SOL/USDT or SOL/USD pair. Bitget offers spot or leveraged trading options, depending on your strategy.
4. Place a buy order : Choose a market order to buy immediately at the current price or a limit order to set a specific price. Verify the amount and confirm the transaction.

More on this topic :

• Discover Why PEPE Price Could Surge in the Next Few Hours !
• Reasons Behind Today’s Decline in ETH, XRP, and SOL Prices
• PayPal Officially Launches Crypto Payment Service !