Solana Sees a Dramatic Drop, Will It Rise Again?

Key Insights:

• Solana is experiencing a gigantic pullback after an impressive 2023–2024 run, and investors are watching closely, at strong levels of support and resistance.

• While plummeting significantly from $200+ to $127, Solana's high level of trading reflects an interest in investors and foretells future recovery.

• Technical analysis shows that Solana is nearly at oversold levels, and moving averages and RSI give investors cues on probable trend reversals.

Solana (SOL) had just been in a correcting phase after a long stint of bullish momentum in 2023 and early 2024. The cryptocurrency, which is famous for high-speed transactions and rising adoption, has faced monumental resistance, and therefore, it experienced a drastic price fall.

Solana’s Market Trend and Recent Performance

According to Ali Charts, Solana has reflected a cyclical pattern of steep uptrends and then correction. A macro trend reversal is reflected in the weekly price action.

In early 2022, Solana saw a buy signal that initiated a steep price increase before selling triggered a long-term downtrend. The bearishness persisted from 2022 and the first half of 2023 with continuous price falls.

Source: Ali Charts

Mid-2023 saw the return of buying activity, prompting a sustained rally. The price gradually increased, breaking through different resistance levels. The latest bullish trend peaked in early 2025 when a sell signal was seen.

The price then decreased by 18.45% to approximately $136.97, marking the beginning of the correction phase. Analysts add that this is common volatility to the crypto market, given that market sentiment and changes in liquidity are the central drivers of price. 

The recent fall put investors and traders into a mindset of questioning if Solana could sustain long-term growth. History, though, has shown that past corrections have normally been succeeded by accumulation phases and further recoveries. Market participants are keen to see if Solana would consolidate within the existing range or dip below lower levels, which would redefine its mid-term trend.

Monthly Market Trends and Technical Levels

Duo Nine reports that February 2025 ranks among the most challenging months in Solana’s trading history. The monthly candlestick time frame reveals a sharp decline from highs above $200 to a closing price of around $127.83. This drop follows a strong bullish phase in 2024, which saw Solana recovering from previous lows below $40.

Source: Duo Nine

The market has been very volatile with deep trends in the upward direction and sharp declines afterward. The history of prices is indicative of firm reaction points over $200, which results in heavy selling pressure.

Although it fell lately, Solana is a strong token in the cryptocurrency market of trading with significant volume at significant prices. The experts note that short-term speculators might lose money since prices are trending sharply in either direction, while long-term investors may consider purchasing at the low prices.

Solana's volume has stood up fairly well, indicating continued interest from retail and institutional investors. Although the correction has affected short-term sentiment, the longer-term situation is uncertain, depending on macroeconomic trends and overall crypto market activity.

Support and Resistance Levels Defining Solana’s Next Moves

Bitunix analysts point out that Solana’s price action suggests a short-term correction before a possible recovery. The daily candlestick time frame highlights strong support and resistance zones.

The key support level at $95 serves as a critical threshold, while resistance levels near $135 and $150 will determine the next breakout.

Source: Bitunix

Presently, Solana is trading at $127.26, down by 7.51% on the day. As long as the price stays above the $125-$135 zone, additional upward pressure may drive it to the $150 mark in Q2 2024.

But if the support level at $95 breaks, then a drop to $80 or below cannot be ruled out. Market players are keeping these levels in mind as long-term investors prefer to buy the dips.

Investors are also monitoring externalities, such as regulatory actions and global macroeconomic trends, that can influence the direction of the crypto market. While Solana's robust ecosystem and high developer activity make it strong, market sentiment will ultimately reveal how it will ride out this correction phase.

Technical Indicators and Market Reactions

QuantScraper states that Solana's price movement on the daily time frame reflects fundamental breakdown and consolidation patterns. In mid-2023 and late 2024, the price ranged from $127 to $180 before breaking to a high value above $280. The ongoing correction, however, has pulled Solana to its previous trading range.

Source: QuantScraper

The moving average trend shows declining momentum, validating increased selling pressure. The price is now testing the $127 support level, which is a traditionally critical zone. Volatility in the market is high, with sharp and big moves impacting investor sentiment. If Solana can maintain its support level, then a recovery phase may follow, pending overall market direction.

Other technical indicators, such as the Relative Strength Index (RSI) and Bollinger Bands, also come into focus by analysts since they suggest that Solana may be on its way to an oversold level.

If the RSI moves into the oversold region, it can signal a potential bounce within the next few weeks. In the meantime, the moving averages, particularly the 50-day and 200-day lines, are being watched by traders to see if Solana will be able to regain bullish momentum.

Recent price actions within Solana show the firm entering a highly critical stage of its market cycle. Aggressive responses continue to reside at major support and resistance points within the cryptocurrency, which is extremely volatile.

Analysts from Bitunix, QuantScraper, Duo Nine, and Ali Charts feature some of the most influential factors behind Solana's trajectory.

To direct future trade strategy, participants will pay close attention to whether the price bottoms out or continues to drop further. Long-term investors also hope for Solana's long-term growth prospects from its high network activity and continued innovation on NFT platforms and decentralized applications.