Solana Drops 11.7% as Tariffs Spark Market Volatility

Solana (SOL) experienced a significant decline in early weekend trading, falling to $154.40 and marking an 11.7% decrease for the week. This downturn was influenced by broader market volatility following a U.S. appeals court decision to reinstate Trump-era tariffs, which had previously been blocked. The reinstatement of these tariffs has caused uncertainty in risk markets, including digital assets like Solana.

Technically, SOL has breached its key support level of $165.94 and is now outside the bullish channel that had been in place since mid-April. The daily chart indicates a series of red candles and a Three Black Crows pattern, suggesting a bearish trend. The 50-day Exponential Moving Average (EMA) at $159.60 has shifted from support to resistance, and the Moving Average Convergence Divergence (MACD) momentum indicators show widening gaps and deepening red histograms, further reinforcing the bearish outlook.

Support levels for SOL are identified at $141.60, $125.95, and $112.04, while the resistance zone is between $176 and $188, with strong rejection noted in this range. The Relative Strength Index (RSI) stands at 46, indicating a neutral to slightly bearish sentiment.

Derivatives liquidations and delays in U.S. spot Solana ETFs have contributed to the bearish sentiment. Futures open interest fell by 3.23% to $7.11 billion, with long liquidations amounting to $18.98 million on Friday, compared to short liquidations of $464,750. This significant unwinding of leveraged long positions reflects a shift in market sentiment. Additionally, the delays in U.S. spot Solana ETFs, despite applications from major firms, have capped optimism. Polymarket places the approval odds at 82%, with some analysts predicting post-approval targets of $440-$600, similar to Bitcoin’s post-ETF rally. However, until the Securities and Exchange Commission (SEC) gives the green light, regaining the $200 mark looks challenging.

Despite the short-term headwinds, Solana continues to attract institutional interest and foster ecosystem growth. Circle’s $250 million USDC mint on Solana in late May has added liquidity and expanded stablecoin utility, with Solana now handling 34% of all stablecoin volume. SOL Strategies is looking to raise $1 billion for validator infrastructure, demonstrating long-term confidence in the network’s scalability. Other catalysts include Coinbase’s 24/7 SOL futures trading, which began on June 13, and ARK Invest’s inclusion of Solana in a Canadian ETF. These developments provide a foundation for future adoption and price growth, although they do not guarantee an immediate bounce back.

For traders, the Solana price prediction remains bearish. Support is expected at $141.60, but unless Solana forms a strong reversal pattern, such as a Hammer or Morning Star with MACD convergence and a retest of the 50 EMA, the path of least resistance remains down. New traders should wait for clear reversal signals to enter, while experienced traders can look for volume confirmation on a breakdown or reversal. Without bullish momentum, Solana may not retest the $200 mark anytime soon.