Solana Price Drops 10% Below $180 Amid Bearish Signals

Solana (SOL) has recently experienced a decline, with its price falling below $180. This downward trend has raised concerns among investors and analysts alike, as the cryptocurrency faces potential further declines. The price of SOL has been moving lower, and there are indications that it might drop below the $170 level. This decline is significant as it comes after a period of consolidation around the $175 level, where the price has been fluctuating for approximately two weeks. The $175 zone has acted as a key supply area, and the recent break below this level suggests that the bears may be gaining control.

The decline in SOL's price is not the only concern for investors. The supply of SOL tokens on centralized exchanges has also dropped significantly, decreasing by 27.4% to 27.01 million. This reduction in supply is approaching the token's lowest level on centralized exchanges since October 2022, which could indicate that holders are moving their tokens off exchanges, potentially in anticipation of a price increase or to hold their assets for the long term.

Despite the recent decline, there are some bullish indicators for SOL. The Solana ecosystem has been experiencing strong growth, with the Total Value Locked (TVL) rising to $9.44 billion, making it the second-largest layer-1 blockchain in terms of TVL. This growth is driven by various decentralized applications (dApps) on the Solana network, including Raydium, Jupiter DEX, Jito liquid staking, and Kamino Lending. Additionally, the memecoin sector on Solana has seen significant activity, with daily trading volumes more than doubling since early April.

Strategic partnerships have also positioned Solana for institutional adoption. The alliance with a leading distributed ledger technology startup aims to bring financial institutions and their real-world assets onto the Solana network. This partnership could potentially connect decentralized finance (DeFi) and traditional finance (TradFi), enhancing Solana's appeal for institutional investors. Furthermore, the launch of the Solana Attestation Service represents a major infrastructural advancement, allowing approved issuers to bind off-chain credentials to wallet addresses and streamline compliance processes.

From a technical perspective, SOL has been producing a V-shaped recovery pattern on the weekly chart since January. This pattern suggests strong buying activity after a significant loss, with a pattern completion objective at the $252 neckline resistance. A solid break above this level could propel SOL toward its all-time high of over $295, reflecting a potential 66% rise from current levels. However, the immediate technical scenario shows SOL facing resistance in the $176-$180 range. A clear break above $180 could initiate the second phase of a higher rally, with subsequent resistance levels around $185, $192, and $200.

Despite the bullish indicators, there are also bearish signals to consider. If SOL fails to hold above the $170-$175 level, it risks revisiting the $157 support zone. A breach below this level could trigger a deeper correction toward $120. Additionally, if the price breaks below $170, it could target $165 and potentially even lower levels. The relationship between SOL and Bitcoin, as well as the overall market sentiment, will be crucial in determining the timing and scope of any potential rally.

In conclusion, while there are bullish indicators for SOL, including strong ecosystem growth and strategic partnerships, the recent decline below $180 and the potential for further drops below $170 present significant challenges. Investors should closely monitor key support levels and the overall market sentiment to navigate the volatile landscape of the cryptocurrency market.