Solana Faces 18% to 22% Decline Risk as Bearish Indicators Mount

Solana (SOL) is facing significant challenges this week, with several technical and market indicators suggesting a potential decline of 18% to 22%, which could push the price below $130 by the end of the week. The cryptocurrency is currently trading below major moving averages, with the 50-day Simple Moving Average (SMA) acting as a crucial resistance point that is hindering any sustained bullish momentum.

Technical analysis reveals that Solana is experiencing bearish absorption, where the cumulative volume delta (CVD) is decreasing faster than the price. This indicates weakening buyer support and thinning liquidity. The Money Flow Index (MFI) also shows declining buy pressure, suggesting that sellers are gradually unwinding their positions. These conditions create a fragile short-term structure for Solana, making it difficult for the cryptocurrency to experience a strong rebound.

Solana's price structure has been in a sideways consolidation pattern since last week, forming a triangle formation. While a breakout above $153 could potentially renew bullish momentum toward $164, the current positioning suggests a higher risk of a downside break. If the bottom of the triangle is breached, a sustained squeeze could drive losses faster, as leveraged longs would be forced to close out in a hurry, further feeding into the decline. The limited buy-side demand exacerbates the likelihood of a rapid price correction.

Solana's role in the broader market also contributes to its volatility. Often serving as the basis for meme coins' liquidity, rising speculative momentum in the meme coin space can fuel price volatility in Solana. When SOL rallies, meme coins based on Solana tend to spike up, forming a feedback loop that contributes to short-term speculation. However, this dynamic can also amplify losses when sentiment shifts, adding to the overall volatility of Solana.

External factors, such as trade tariff concerns, have prompted a risk-off mood among crypto traders. Investors may shift away from risk assets like Solana until these tensions ease, further adding to the uncertainty surrounding the cryptocurrency. Additionally, the Solana ETF approval process remains in focus, with the SEC requesting amended filings this month. This could accelerate the timeline for a decision, but until there is regulatory clarity, speculation will likely continue to drive volatility in Solana's price.