After a strong rally in early Q4, Solana (SOL) suddenly plunged, losing nearly 20% of its value in just a few sessions. This sharp decline dragged overall market sentiment into uncertainty.
Although on-chain data continues to confirm the robust activity of the Solana ecosystem, technical analysts warn that the current correction may not yet be over. SOL could fall below the psychological $100 level if the key support fails.
Solana Analysis: Correction Risk Persists Despite Temporary Support
According to data from CoinGecko, Solana (SOL) is currently trading around $156, after touching a short-term low at $148. Since early November, SOL has lost nearly 20% of its market value.
The weekly chart shows that the token hovers around the long-term ascending trendline established since 2023. This structure has repeatedly served as a “lifeline” for Solana’s medium-term uptrend.
However, as a Solana analysis highlighted by a trader on X, a break below this multi-year trendline could trigger a further 30-40% decline. This drop could drag SOL below $100, a psychological support level that might spark a new wave of panic selling.
SOL/USDT 1W chart. Source: X
“If this breaks, trust me there’s no magic. It’s a 30-40% slide straight into the next liquidity zone. And yet, people are still trying to buy the dip like it’s 2021. Sometimes the chart says more than the narrative ever could,” the analyst commented.
Another weekly Solana analysis suggests that $122 remains a key high-risk, high-reward entry level, while $200 stands as the critical resistance to confirm the end of the downtrend that began in mid-2024.
A separate post shared a liquidity heatmap for SOL/USD, showing that price action recently swept below the $180 support zone, clearing downside liquidity clusters. In contrast, dense upside liquidity has formed around the $200-$220 range. The analyst cautioned against premature optimism about a bullish reversal.
He also agreed with the broader view that any sustained recovery for altcoins hinges on Bitcoin’s ability to form a clear bottom. In his opinion, SOL’s rebound could be delayed until BTC stabilizes above key supports near $95,000.
Liquidity heatmap for SOL. Source: X
“Some big liquidity clusters have emerged to the upside, but don’t get too excited. Until Bitcoin decides to form a bottom, Solana will go down,” the analyst warned.
The Solana price structure shows fragility below $150, and a deeper retest around $120 or even $100 remains plausible unless Bitcoin finds a stable floor.
On-Chain Strength Remains, but Short-Term Sentiment Is Fragile
In contrast to the price correction, on-chain indicators paint a far more resilient picture for Solana.
According to Vibhu, Solana’s network generates $8.5 million in weekly blockspace value, records $29 billion in DEX volume (surpassing Ethereum), processes 543 million transactions, and maintains 15.5 million active addresses, more than any other blockchain. These figures dispel the “Solana is dead” narrative on social media.
At the same time, Solana continues to attract stablecoin capital inflows, setting a new all-time high for adjusted stablecoin volume in October, underscoring the network’s increasing utility in DeFi settlements.
However, the sharp price drop has significantly impacted institutional portfolios. Forward Industries, Inc. (Nasdaq: FORD) reportedly holds 6.82 million SOL, purchased at an average of $232, representing a 24% unrealized loss of roughly $382 million.
Solana proves its resilience as a blockchain with strong real-world adoption and active network usage. While fundamentals remain solid, Solana’s short-term outlook is still tied to Bitcoin’s next move. Sustained recovery will only occur when BTC regains momentum above major support zones.
In the meantime, defending the $150–$160 range is crucial to avoid a structural breakdown that could intensify technical and psychological selling pressure.
Despite the market downturn, Solana’s official X account remains optimistic, reminding the community that bear markets often produce the strongest projects.
“Don’t be afraid of red candles. Red candles make community. Don’t be afraid of FUD. FUD creates community. Don’t be afraid of bear markets. The best successes come out of bear markets.” Solana’s updates.
