Solana's 10% Surge Fades Amidst Market Volatility, Caution Urged

Coin WorldSaturday, Mar 1, 2025 11:29 am ET

1min read

Solana Price Rebounds 10% Amidst Market Volatility, But Caution is Advised

The cryptocurrency market has witnessed a rebound over the weekend, with Solana (SOL) price surging by a strong 10% before resuming its downward trend. Despite holding the critical $130 support level, sol price remains vulnerable to further declines. In this analysis, we explore three reasons why investors should exercise caution before purchasing SOL at this juncture.

Solana's recent price recovery has been short-lived, with the asset already shedding 3% in the past 24 hours to trade at around $140. As bearish sentiment regains control over the market, it is essential to consider the following factors before making any investment decisions.

Solana Price Enters Distribution Phase

Solana's price action suggests that it is currently in a distribution phase, as indicated by the Power of Three (PO3) setup. During this phase, large traders rapidly sell Solana, exerting downward pressure on the price. After completing the accumulation phase in 2024, when large players increased their positions, Solana recently entered the manipulation phase, and now, distribution is in play.

As large traders begin to exit the market, SOL price is likely to drop, collecting liquidity at the $112 level. If the downtrend extends and Solana breaches the "make and break" support level of $77, a further decline to $30 could be in store.

Solana Death Cross Looms

A death cross is also looming on Solana's daily chart, with the 50-day Simple Moving Average (SMA) tipping south and nearing a bearish crossover with the 200-day SMA. If the 50-day SMA crosses below the longer-term SMA, it could trigger a sharp bearish move for Solana price, making a drop to $112 likely in the near term.

Moreover, SOL continues to trade below its 200-day SMA of $200. As long as SOL remains below this level, it strengthens the bearish Solana price forecast, making it one of the top reasons to sell.

Whales Dump SOL Amidst FTX Unlock Anxiety

Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.