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Amid the market retrace, Solana (SOL) saw a massive correction that dragged its price to a five-month low. If SOL fails to reclaim its key support levels, some market watchers predict the altcoin risks further bleeding.
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Solana Sentiment Plummets To Yearly Low
On Monday afternoon, the crypto market continued the weekend bleeding after failing to hold its key support levels. In the past 24 hours, most cryptocurrencies have dropped to monthly lows amid the latest market correction.
Bitcoin, the largest crypto by market capitalization, moved from the $96,000 mark to the range lows of its post-elections range before losing the $90,000 support for the first time since November.
As the flagship crypto bled, Solana, one of the leading Altcoins this cycle, followed BTC’s steps. SOL dropped 12% from the $150 support, tapping the $140 level and dropping to $131 on Tuesday morning, its lowest price since September.
Analyst Miles Deutscher pointed out that Solana’s sentiment has reached its lowest level in over a year. According to the post, the sentiment for SOL hasn’t been this low since the cryptocurrency first reclaimed the $100 mark at the start of 2024.
It’s worth noting that market sentiment has shifted over the past few weeks, with several community members expressing increasing fatigue from the numerous Solana-based memecoin scams.
After the Libra token crash, which saw over $100 million taken from investors, the market started to see capital rotation from Solana to Ethereum. At the time, SOL’s price dropped 12%, losing the $180 support zone and failing to reclaim it for the past week.
Deutscher stated that Solana is “finally having its capitulation moment” after being a top performer throughout last year. He also implied that the capitulation suggests a rebound could be coming.
Another 50% Drop Coming?
Crypto analyst Jelle highlighted that Solana is registering a 50% drop from January highs and has retraced to a key weekly level. The $130 and $140 zone was a key support level throughout the 2021 all-time high (ATH) breakout and the 2024 rally.
Jelle also suggested that holding this area will be key for Solana’s performance, as the upcoming token unlock, scheduled for March 1st, will affect its price.
Ali Martinez commented on SOL’s recent performance, noting that SOL’s trading pair against BTC resembles ETH/BTC. According to the analyst, the SOL/BTC chart is starting to look like Ethereum’s trading pair against BTC’s past price action.
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If the pattern continues, SOL/BTC could be poised for a 50% drop to 0.0008, sending Solana’s price to the $70 region.
Meanwhile, Altcoin Sherpa considers the $90-$125 region a “good area overall” to purchase, as he doesn’t believe that Solana is “dead.” The analyst added that SOL will likely recover from the lows but expects some volatility.
As of this writing, SOL trades at $141.36, a 45% decline in the monthly timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
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