Ella Mitchell 
Solana’s native token, SOL, has recently faced significant selling pressure, bringing the price below $130 and causing concern among investors. As the cryptocurrency struggles near a critical support level at $125, traders remain on edge, watching closely for any signs of stabilization or further declines. Since hitting its peak in January, Solana has been trending downward, making lower lows and reflecting a broader market downturn. Some analysts warn of a potential scenario where Solana’s price could fall drastically—possibly below $10—if current support levels fail to hold.
Bearish Signals Raise Concerns
SuperTrend Indicator Flashes Red:
- Crypto analyst Ali Martinez has pointed to a bearish SuperTrend indicator on the weekly chart, which has historically been a precursor to sharp declines. The last time this indicator turned bearish, Solana’s price plummeted by 95%, raising concerns about a repeat scenario.
- If the current bearish pattern holds, it could signal a continuation of the downtrend, potentially leading to a much steeper decline in the months ahead.
On-Chain Activity Declines:
- Network Activity: Solana’s daily transactions have dropped significantly, falling from 71,738 in January to 24,505 in March. This reduction in activity weakens the network’s overall demand and revenue from transaction fees.
- Total Value Locked (TVL): Solana’s DeFi ecosystem has also seen a sharp decline in TVL, which measures the total amount of assets deposited into decentralized finance protocols. From a high of $12.1 billion in January, TVL has fallen to $7 billion as of mid-March. This 41% drop highlights waning confidence in Solana’s decentralized applications and overall ecosystem.
Futures Market Signals Further Weakness
Futures Open Interest Declines:
- The futures market for Solana shows additional signs of bearish sentiment. Open interest (OI) in futures contracts—an indicator of market participation—has dropped from $8.57 billion in January to $4.03 billion. This reduction in OI suggests that many traders are closing their positions to minimize exposure to further losses.
Negative Funding Rates:
- Funding rates for Solana futures have turned negative, indicating that short sellers currently dominate the market. When funding rates are negative, it means traders are paying to maintain short positions, reflecting widespread bearish sentiment.
- Without a clear bullish catalyst to shift momentum, Solana may struggle to regain its footing. A decisive break below $125 could push the price down to $100, and continued selling pressure could lead to even larger losses.
Key Price Levels to Watch
Immediate Support and Resistance Zones:
- $125: This critical support level is currently under heavy pressure. If it fails, the next major psychological support may be $100, with further declines potentially opening the door to even lower targets.
- $150: On the upside, a break above $150 would signal that buyers are regaining some control. However, given the current trend, a move to this level seems unlikely without a major shift in market sentiment.
Long-Term Outlook:
- In the worst-case scenario, a break below $100 could lead to a test of historical lows, with some analysts predicting a possible decline to sub-$10 levels. This would represent a dramatic shift for Solana, which has been one of the most popular Layer 1 blockchains.
- For bullish momentum to return, Solana would need to reclaim higher levels, supported by increased on-chain activity, rising TVL, and a reversal in futures market sentiment.
Conclusion: A Critical Moment for Solana
Solana’s price forecast remains uncertain as it grapples with significant bearish signals and declining on-chain metrics. The combination of lower transaction activity, reduced TVL, and bearish futures data suggests that SOL may face further downside unless a strong bullish catalyst emerges. While there is still potential for a rebound, the current landscape favors caution. Investors should closely monitor key support levels and market sentiment to determine Solana’s next major move.
