Solana Plunges 16% After US Crypto Reserve Boost
1min read Solana (SOL) has experienced a significant decline in the past 24 hours, with its market capitalization dropping below $70 billion. The cryptocurrency has lost more than 16% of its value, following a recent rally to $178 after being added to the US strategic crypto reserve. However, the momentum quickly faded, leading to a deep correction.
The technical indicators, including the Ichimoku Cloud and Directional Movement Index (DMI), suggest that sol remains in a bearish phase, with downside risks still present. The Ichimoku Cloud shows that the price is currently trading well below the cloud, confirming a bearish trend. The recent sharp decline followed a rejection from the Tenkan-sen (blue line), which is now sloping downward, signaling short-term weakness. The Kijun-sen (red line) is also positioned above the price, indicating a lack of bullish momentum. Meanwhile, the Senkou Span A and Senkou Span B form a red future cloud, suggesting that bearish conditions could persist in the near term. Downside pressure remains dominant unless SOL reclaims key levels and breaks above the cloud.
The Solana Directional Movement Index (DMI) chart indicates that the Average Directional Index (ADX) is currently at 22.1, down from 30.5 yesterday when the current correction began. This decline follows SOL’s price surge after its inclusion in the U.S. crypto strategic reserve. A falling ADX suggests weakening trend strength, reflecting the market’s shift from strong momentum to a more indecisive phase. While the correction is still in play, the lower ADX reading signals that the downtrend lacks significant strength compared to yesterday.
If SOL manages to stabilize and reclaim key resistance levels, a rebound towards $200 could still be possible in the coming weeks. However, if the current downtrend remains strong, SOL could decline further, potentially testing the $125 support level. This zone is critical, as losing it would push SOL to its lowest trading levels since September 2024. Given the current technical structure, with price trading below key indicators like the Ichimoku Cloud and the Kijun-sen, further downside remains a possibility unless buying pressure increases significantly.
On the other hand, if Solana price manages to reverse its trend and regain momentum, it could challenge the $160 