Solana (SOL) Faces Tough Times: Analysts Predict $100 Test on Horizon

Solana (SOL) has recently struggled, experiencing a significant decline as it drops below crucial support levels. Analysts are expressing concerns about its future performance, suggesting it may soon retest the $100 mark. While institutional interest in Solana ETFs appears high, general market pressure remains a challenge.

Key Takeaways

Solana (SOL) has plunged 13% over the past week and has breached a critical support level of $120.
The cryptocurrency has retraced nearly 60% from its all-time high of $293, prompting concerns about its near-term stability.
Analysts predict that Solana could test the $100 price point, with some even suggesting a possibility of dropping to $80.
Despite the bearish trend, there are notable inflows into Solana exchange-traded funds (ETFs), indicating growing institutional interest.

Solana

Solana's Decline: What’s Happening?

Solana (SOL) is currently one of the underperformers among the top ten cryptocurrencies, having experienced a steep 13% drop over the last week. This decline follows the cryptocurrency's fall below the pivotal support level of $120. This support had previously acted as a crucial barrier to prevent further price drops since the beginning of the month.

For investors with a bullish outlook, recent statistics from CoinGecko indicate a troubling trend, with Solana retracing nearly 60% from its all-time high of $293, which it reached in January this year. Year-to-date, the token has suffered a significant loss of 40%, triggering concerns among analysts regarding its stability in the near future.

Experts are warning that if market conditions do not improve, Solana's price could soon revisit the $100 mark—levels not observed since April. Should this occur, it would denote an additional decline of about 15.9%. Market commentator EddieTradezz has highlighted a bearish “head and shoulders” pattern emerging on Solana’s daily chart, suggesting that a substantial decline might be imminent. He observes that Solana is currently breaking through long-term resistance levels, with April’s lows near $95 potentially being a more realistic target than $100.

Adding to the negative sentiment, analyst ColdBloodShill has indicated that Solana might even fall to around $80, which would represent a drastic further decline of 32%. However, as EddieTradezz notes, any potential recovery will greatly depend on overall market conditions and investor sentiment.

Institutional Interest in Solana ETFs Grows

Despite the bearish signals, there has been a notable positive development in institutional interest. Recently approved Solana exchange-traded funds (ETFs) in the U.S. have garnered considerable attention, accumulating $63.9 million in net inflows over the past week. This suggests that institutional investors may be starting to view Solana as a viable long-term investment option.

However, the positive developments surrounding institutional interest are being overwhelmed by significant selling pressure in the spot markets. Increased market volatility has led to a rise in liquidations for leveraged positions, hindering Solana’s price response to the generally favorable institutional news.

Overall, the future for Solana remains uncertain. While the growing institutional interest provides some optimism, the immediate outlook is clouded by heightened selling pressure and challenges in regaining capital within the broader market, which has recently fallen below the $2.90 trillion mark in total market capitalization.

Solana

The 1-D chart indicates that SOL’s price is trending downwards, having broken below the essential $120 support as of Thursday. Source: SOLUSDT on TradingView.com

Featured image from DALL-E, chart from TradingView.com