Solana's Price Dips Below $130 as Capitulation Risk Grows

Solana's price has fallen below the crucial $130 mark, suggesting a heightened risk of capitulation towards deeper liquidity levels beneath $100. The current conditions indicate a shift in market dynamics, with bearish pressures increasingly dominating.

Key Takeaways

Solana's price has dropped below $130, losing significant support.
This decline increases the likelihood of a capitulation event, potentially pulling prices towards $100.
There are concerns about weak buyer response and low trading volumes.
A stronger recovery above the $130 level is necessary to reverse the bearish trend.

SOL price bearish capitulation at risk at price losses support.

Analyzing Solana's Price Movements

Solana price slips under $130 as capitulation risk increases - 1
SOLUSDT (1D) Chart, Source: TradingView

Currently, Solana is showing signs of weakness, with its price slipping below the important $130 support level on a closing basis. This drop is significant, as this area had previously provided a safety net for buyers. The loss of this support implies that sellers are gaining the upper hand and there is a diminishing bullish sentiment among traders.

At present, Solana is testing the Value Area Low (VAL) of its trading range. While this level has offered short-term support recently, the accompanying low trading volume raises concerns about the strength of buyer interest. Typically, when support holds but fails to spark significant buying activity, it often precedes further declines instead of a solid rebound. This sentiment is echoed by DeepSeek AI, which highlights a cautious outlook for major altcoins like Solana, XRP, and Dogecoin.

Adding to the bearish sentiment is Solana's position relative to the Point of Control (POC). The price remains beneath this key volume level, indicating that trading is occurring outside its equilibrium range. In these conditions, prices are likely to seek lower liquidity areas where stronger price movements may occur. As long as SOL is trading below the POC, the likelihood of ongoing downward pressure remains high.

From a liquidity viewpoint, there is a considerable amount of liquid assets resting below the $100 level, near prior swing lows that have not been revisited in some time. Markets frequently return to these levels during times of weakness because traders remember them, leading to an accumulation of stop-loss orders and bids.

This scenario sets the stage for a potential capitulation. Capitulation often happens when long-term weakness results in a swift sell-off that clears out remaining liquidity and compels latecomers to exit their positions. Solana's loss of key support, combined with poor volume reactions and untested liquidity below, raises the risk of such an event. This is happening even as Bhutan introduces its gold-backed TER token on the Solana network, showcasing the contrast between the ecosystem's growth and the current technical pressures on the price.

The overall market structure supports this bearish viewpoint. Solana has been forming lower highs, struggling to establish any significant higher lows. This trend indicates a developing downtrend. Unless there is a reclaim of the POC and a robust move back above the $130 level, any short-term recoveries are likely to be corrective rather than genuine upswings.

Looking Ahead: What to Expect

If Solana continues below the Point of Control and is unable to reclaim the $130 level in the upcoming days, the chances of a capitulation move toward the previous swing low below $100 increase significantly. A rise above these critical levels will be essential to alter the current bearish outlook.