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Solana (SOL) has experienced an approximate 40% pullback over the last month, losing essential support levels since February. With its price retesting a significant horizontal threshold, several analysts caution about a potential 50% drop to an annual low.
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Solana Loses Essential Support Level
Solana has ranked among the premier cryptocurrencies in this cycle, driven by the market’s memecoin enthusiasm. The altcoin surged over 270% within a year to its most recent all-time high (ATH) of $270, recorded nearly two months prior.
However, SOL’s bullish outlook has markedly diminished since January, recently plummeting to its lowest point in more than a year. Consequently, the cryptocurrency has dropped over 50% from its January 19 ATH.
At the beginning of last month, Solana lost the crucial $200-$220 support area, with the market downturn in February causing SOL to revisit its next significant levels. After dropping below the $180 point two weeks ago, its price hovered within the $130-$150 range, shooting up to the $179 mark at the beginning of March.
This week’s market correction, which saw Bitcoin (BTC) descend to $76,000 for the first time in four months, has pushed Solana to fresh monthly lows.
On Tuesday, SOL’s price briefly fell to $111, a level not encountered since the August 2024 market crash, before rebounding to $125. Amidst the ongoing retest, pseudonymous trader Crypto Busy cautioned that SOL must “maintain this critical support to keep a bullish sentiment above $100.”
Crypto analyst Ali Martinez had previously remarked that the most vital zone for Solana seems to be between $110 and $125, as this horizontal threshold functioned as key support during its rallies in 2021 and 2024. The analyst indicated that “holding above this range could be crucial for the upcoming move.”
SOL Price Faces Risk of Move to $60
Martinez also emphasized that Solana may be on the brink of a breakdown, having breached its key level. According to the post, SOL is at risk of a 50% crash to the $60 level if it fails to maintain the $125 support area.
The analyst noted that the cryptocurrency has been forming a right-angled ascending broadening pattern since March 2024, when it first reclaimed that level in this cycle.
During this timeframe, every higher peak on Solana’s chart has established a rising trendline at the top of the pattern, while the $125 support has remained “as a robust horizontal support trendline.”
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Nonetheless, SOL’s breach below this horizontal area has heightened the likelihood of a 50% price correction to Q4 2023 levels. Furthermore, Martinez recently warned of a potential correction based on Solana’s trading pair against Bitcoin, which has begun to mirror ETH/BTC’s chart.
The analyst suggested that the SOL/BTC chart is resembling Ethereum’s trading pair against BTC’s past price movements, adding that if this trend continues, the SOL/BTC chart could witness a decline to the 0.0008 area. Following the recent price movements, the trading pair reached a 15-month low of 0.0014624 on Tuesday.
At the time of writing, Solana trades at $124, reflecting a 14% decline within the weekly timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
