Solana Price Drops as More Downside Is on the Horizon: Is It Time to Buy SOL?

The Solana price has dived almost 1% in the past 24 hours, sliding to $144. Its 24-hour trading volume worsens the outlook, decreasing 20% to $2.50 billion, signaling a fall in market activity. Despite the drop, SOL is still up by 1.25% in a week but down by 24% in the last 30 days, with the altcoin retaining a 614% increase in the past year.

This annual gain puts Solana in a good position to return to solid growth once the broader market regains momentum. Moreover, all hope is not lost despite the altcoin entering the oversold zone. If the network gives the coin some of the most vital fundamentals in crypto, it could bounce back strongly in the coming days. 

Data from Coinglass shows a spike in short positions liquidations, reaching $1.57 million in 24 hours and $175k on Monday. About $5 million long positions were liquidated in the last 24 hours, and $394k on the day.

Solana Statistical Data

Based on CoinmarketCap data:

• SOL price now – $144
• SOL market cap – $67 billion
• SOL total supply – 583 million
• SOL circulating supply – 466 million 
• SOL ranking – #5

Solana Price Forms a Rounding Top Pattern, What’s Next?

After a few weeks of consolidation, the Solana price swiftly returned from support at $140 to $162 amid the uptick in crypto prices on August 24. However, traders and investors entered the SOL market, booking early profits and causing a drop in prices. This resulted in the formation of a rounding top in the 4-hour chart timeframe. However, the bulls have established a strong support at $140, which is a cushion against further downside. 

Meanwhile, the SOL market flaunts a bearish picture, with more downsides expected if the bulls don’t gain momentum. The Solana price trades below major technical indicators, including the 50-day and 200-day Simple Moving Averages(SMAs). The $150 and $153(which coincide with the 50-day and 200-day) suppress the bulls against any upward movement. 

Nonetheless, after Solana was considered overbought with its Relative Strength Index at 83, it experienced a correction. This correction sent SOL to the oversold zones, currently roaming around the 39 levels. However, the SOL price could surge if the bulls increase their buying appetite as the alt is undervalued. 

On the other fence, the Moving Average Convergence Divergence (MACD) worsens the outlook as it steadily paints a bearish picture. This is evident as the MACD indicator (blue) has flipped below the signal line (orange), suggesting dwindling buyer momentum. Moreover, it has plunged into negative territory, with the histograms flashing red. Traders looking to rally behind SOL should consider waiting till the MACD changes.

Is More Downside Expected, or Will the Bulls Gain Stamina?

In the 4-hour chart analysis, the odds tilt in favor of the sellers, as the bulls are nowhere to be seen. Meanwhile, the price could face more downsides due to the bearish prospects in the SOL market. If the bears capitalize on the MACD, which calls for a sell signal, they might breach the $140 support level.

In such a case, a breach and break below support will drive the Solana price to $137. Conversely, Solana’s price could surge if the bulls gain stamina at this level and initiate a buy-back campaign, as the altcoin is undervalued. In such a case, a break and close above the $153 level would invalidate the bearish thesis.