Analyzing the Recent 21% Drop in Solana's Price

A recent report from AMBCrypto reveals that despite a 21% drop in Solana (SOL) prices, large investors, or "whales," have been actively accumulating SOL. While Solana experienced substantial weekly inflows of $421 million into new U.S. exchange-traded funds (ETFs), other cryptocurrencies faced significant outflows—Bitcoin (BTC) alone saw $946 million leave the market. Despite this influx, Solana's price was still under bearish pressure at the time of reporting. This raises an important question: will this recent price dip trigger further declines, or can we expect a rebound?

Key Takeaways

Solana - Analyzing the Recent 21% Drop in Solana's Price

Understanding Solana’s Price Movement

Solana 1-day Chart Source: SOL/USDT on TradingView

Following a price crash on October 10, SOL bulls attempted to protect the demand zone between $170 and $180 (highlighted in cyan). They managed to create higher lows; however, this was misleading. These higher lows did not translate into higher highs, instead forming a symmetrical triangle pattern (shown in yellow) after a previous bearish trend earlier in October.

During this consolidation period, the On-Balance Volume (OBV) indicator continued to decline, signaling that selling pressure remained strong. Additionally, the Money Flow Index (MFI) failed to surpass the 50 level, indicating that momentum and capital inflows were favoring the bears.

Recent price losses have pushed SOL below the previous swing low of $168.8 recorded on October 10. Just before this report was filed, the support level of $156.65 from July had been tested.

The range between $145 and $155 was a critical technical zone in late June and early July; it may serve as a significant demand area in the near future. Traders focusing on shorter timeframes can look at Monday's high and low prices of $189 and $163 to develop their market perspectives.

In the short term, the $163 to $170 range is expected to function as resistance, while $150 could act as a nearby support level to monitor closely.

Disclaimer: The information provided does not serve as financial, investment, trading, or any other form of advice and reflects solely the writer’s views.