Solana's Price Drops 1.98% Amid Mixed Market Signals

Solana (SOL) is currently trading at approximately $149, after finding support around its 50-day Exponential Moving Average (EMA). Market analysts are closely monitoring the cryptocurrency’s chart patterns, with some suggesting a potential for substantial upward movement in the coming months.

Cryptocurrency analyst Ali Charts has identified what appears to be a Cup and Handle formation on Solana’s weekly timeframe. This bullish pattern typically precedes an upward breakout and could signal strength if SOL breaks above the descending trend line forming the handle. According to Ali Charts, a weekly candle close above this level might trigger a rally toward $4,500, though no specific timeframe was provided for such a move.

However, current market conditions present mixed signals. Solana’s price action has returned from early-week highs to hover near $150, suggesting external pressures that could affect the optimistic outlook. One factor directly impacting SOL’s price outlook is the decline in decentralized exchange (DEX) trading volume on its ecosystem. Data shows that SOL DEX volumes have fallen dramatically from $20 billion to $6 billion in the last week. This drop can be attributed to a recent slowdown in meme coin trading activity on the Solana blockchain. Reduced transactions could limit the network’s activity levels, which has historically correlated with Solana price movements throughout prior cycles. Lower trading activity may reduce investor interest, making it harder for SOL to gain momentum. This presents a challenge for its price rally and potential breakout.

Despite these challenges, Solana’s ecosystem shows signs of growth in other areas. The value of stablecoins on the Solana blockchain has steadily increased since early February, with the stablecoin market capitalization currently standing at $13.06 billion. This stablecoin activity indicates a positive outlook, as it boosts network usage and can attract more users to the ecosystem, driven by Decentralized Finance (DeFi), meme coins, and payment applications.

Another potential catalyst for Solana is the increasing likelihood of a spot Exchange-Traded Fund (ETF) approval. Reports indicate that the probability of US regulators approving a Solana spot ETF in 2025 has risen to 90%. Six asset managers have filed for an SOL ETF and are awaiting clearance from the US Securities and Exchange Commission (SEC). ETF approvals could make it easier for traditional investors to gain exposure to SOL without needing to purchase and store the cryptocurrency directly, potentially lending more legitimacy to SOL and increasing liquidity.

From a technical perspective, Solana is currently in a consolidation phase, with the price hovering near the $147-$150 level. This sideways trading could be a prelude to a more decisive move once a breakout occurs. Key support exists around the $146 level, which has acted as a crucial buffer preventing further declines. On the upside, immediate resistance is forming near $150, a level that has previously halted bullish advances. If this resistance zone is broken, it could trigger a stronger upward push. The next resistance to watch would be the $164 level, and if buyers can push past this barrier, it could pave the way for a rally toward $211 and beyond. The Relative Strength Index (RSI) on the daily chart reads 61, above its neutral level of 50, indicating bullish momentum. However, if SOL closes below $140.30 (its 50-day EMA), the correction could extend to retest its daily support level at $118.10.

At the time of writing, Solana price was trading at $148, down by 1.98% within the last 24 hours. This decline is attributed to higher levels of uncertainty in the broader crypto market. The current market conditions present a mixed outlook for Solana, with both bullish and bearish signals. The Cup and Handle pattern suggests a potential rally to $4,500, but the decline in DEX volumes and the bearish sentiment among futures traders pose challenges to this optimistic view. The increasing stablecoin market cap and the potential for ETF approval provide reasons for optimism, but the market will need to overcome current headwinds for SOL to reach its full potential.