Solana (SOL) has suffered a major blow, breaking below the crucial $200 support and plunging to $130—its lowest level in five months. This marks a significant demand zone, but weak market participation raises concerns about a potential bull trap.
Technical and Market Signals Flash Green
Over the past month, SOL has dropped over 30%, driven by market-wide volatility that has pushed high-cap assets below key support levels. Despite the prevailing uncertainty, technical indicators hint at a possible trend reversal.
One of the strongest bullish signals comes from the TD Sequential indicator, which has flashed a strong buy signal. Historically, similar price levels have attracted dip buyers, making this a crucial test for SOL’s support. Additionally, Bitcoin’s (BTC) consolidation phase may encourage an altcoin rotation, potentially increasing demand for Solana.
#Solana $SOL looks ready for a rebound. The TD Sequential indicator just flashed a buy signal on the 4-day chart, suggesting bullish momentum could pick up soon! pic.twitter.com/e10cGhfwxV
— Ali (@ali_charts) March 9, 2025
Will Solana Bulls Defend This Zone?
Despite bullish indicators, trading volume has collapsed by 61%, signaling weak buying pressure. The anticipated “buy-the-dip” sentiment remains absent, as red candlesticks dominate the daily chart.
Profit-taking from SOL’s March rally to nearly $180 has continued, weighing on price action. Worse, the SOL/BTC pair has plunged to a two-year low, highlighting growing investor hesitation. If buyers fail to step in, deeper corrections could be on the horizon.
Open Interest and Liquidation Risks
Solana’s Open Interest (OI) has edged up 1.63% to $3.95 billion, but this rise lacks strong accumulation. Just last week, OI peaked at $5.31 billion as SOL attempted to reclaim $180, only to nosedive 20.45% the next day due to heavy selling pressure.
While rising OI is typically bullish in strong uptrends, in volatile conditions, it increases the risk of mass liquidations. With sentiment fragile and price action still shaky, Solana remains at a crossroads. Will buyers step up to defend this critical zone, or is another downturn inevitable?
Also Read: Solana’s Yakovenko Denies Lobbying for Trump’s Crypto Reserve—Did Ripple Make a Move for XRP?
As SOL hovers near a key demand level, traders should watch for a decisive move in either direction. A confirmed recovery could validate the buy signal, but if weakness persists, the risk of another leg down remains high.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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