Solana (SOL) is currently navigating a turbulent short-term market landscape, with technical signals pointing to further downside. After retreating nearly 10% from its recent high of $171.90, SOL was trading around $155 at the time of analysis. Despite significant on-chain activity and strong revenue generation, these fundamentals have not translated into a sustained bullish trend.
One of the key areas under scrutiny is the $145–$155 demand zone, which has acted as a critical support level since early November. This zone has managed to hold off bearish momentum for the past week, particularly near the psychologically important $150 mark. However, pressure is mounting, and a test of the lower boundary near $140 appears increasingly likely.
The broader market context is also influencing SOL’s trajectory. With Bitcoin fluctuating around the $102,000 level, any significant downturn in BTC could accelerate selling across altcoins, including Solana. If Bitcoin fails to hold above the $98,000–$100,000 range, it may trigger a cascading effect, pulling SOL below its current support.
Technical indicators reinforce this bearish outlook. On the daily chart, SOL has broken below a symmetrical triangle formation, losing grip on the $180 support zone in early November. Since that breakdown, the asset has carved out a pattern of lower highs and lower lows — a classic sign of a prevailing downtrend.
The On-Balance Volume (OBV) indicator, which tracks volume flow to determine buying and selling pressure, has been trending downward. This suggests that the recent price declines are backed by genuine sell-offs rather than mere stop-loss hunting or temporary liquidity moves. The Money Flow Index (MFI), another momentum gauge, remains below the neutral 50 level on the daily timeframe and even dipped under 20 on the hourly chart — a level typically associated with oversold conditions. However, in the current context, it reflects persistent seller dominance rather than a setup for recovery.
A one-month heatmap analysis further supports the likelihood of a deeper correction. Liquidity clusters near $144 and $140 present magnetic zones that could draw the price downward. These levels are close enough to current prices to act as short-term gravitational pulls, potentially leading to a bounce only after a deeper dip.
If the $140 zone fails to hold, the next major liquidity pocket lies near $120. This could be the ultimate downside risk area in the near term before any significant recovery attempt. Traders should be prepared for extended volatility and additional bearish pressure, especially if market sentiment deteriorates further.
Nevertheless, a bounce from $140 remains a viable scenario, particularly if Bitcoin can stabilize or rally from its current position. In that case, SOL could attempt to reclaim the $150–$155 region and possibly push higher if bullish momentum returns.
Looking beyond immediate price action, it’s important to note that Solana continues to lead in areas like stablecoin transaction volumes and network efficiency. These fundamental strengths could eventually serve as catalysts for long-term growth, but they are unlikely to shield SOL from short-term market corrections driven by macro trends and technical momentum.
In the medium term, traders and investors should monitor key resistance levels around $160 and $171. A break above these zones, especially with rising OBV and MFI values, could signal a trend reversal. Until then, caution is warranted, and entries should be timed carefully, particularly near oversold zones.
For long-term holders, the current downturn may offer an opportunity for accumulation, especially if SOL approaches the $120–$140 range. However, proper risk management and a diversified portfolio remain essential, given the volatile nature of the crypto market.
Additionally, macroeconomic factors such as interest rate announcements, inflation data, and broader equity market trends could have spillover effects on digital assets, including Solana. Traders should keep an eye on these external cues when planning their strategies.
In conclusion, short-term sentiment around Solana remains bearish with a high probability of testing the $140 level. While a bounce is plausible from that zone, further downside toward $120 cannot be ruled out if market conditions worsen. Traders should stay vigilant, use stop-losses, and be ready to adjust their strategies as the situation evolves.