Solana (SOL) Price Analysis: Facing Increasing Bearish Pressure, Targeting $100

Solana (SOL) has been facing increasing bearish pressure in recent trading sessions, with daily active addresses and transaction volumes continuing to decline.

Solana (SOL) faced increasing bearish pressure in recent trading sessions as daily active addresses and transaction volumes continued to decline. Despite a brief attempt at a rebound, the market encountered resistance at the 50% Fibonacci retracement level, keeping the cryptocurrency on a downward trajectory.

The broader crypto market also experienced selling pressure, with Bitcoin (BTC) and Ethereum (ETH) trading lower. BTC dropped by 2.1% in the past 24 hours to $65,087, while ETH fell by 6.5% to $2,034.

Solana’s Price Action and Market Reaction

After a period of consolidation, SOL experienced a sharp downturn following the opening of the Asian trading session. The cryptocurrency dropped from around $138 to $131 by the time of writing.

While trading volumes increased by 4% to $3.4 billion in the past 24 hours, the surge in volume did not translate into bullish momentum.

Solana’s price retracement wiped out a portion of its recent gains, and investors appeared to be taking a breather from the rally that began on March 11.

The combination of macroeconomic concerns, including the Federal Reserve’s decision to keep interest rates unchanged and former U.S. President Donald Trump’s announcement of new tariffs on imported vehicles and auto parts, contributed to increased uncertainty in the financial markets.

These economic factors fueled inflation fears, leading investors to speculate that the Fed might delay interest rate cuts. The prospect of prolonged higher interest rates placed pressure on riskier assets, including cryptocurrencies.

Solana’s Active Addresses and Transactions Decline

A critical factor contributing to Solana’s decline was the significant drop in daily active addresses and transactions. According to data from Artemis, both metrics fell sharply since the beginning of the year.

The decline in activity was largely attributed to reduced demand for meme coins and decentralized finance (DeFi) applications on the Solana network.

Meme coins were a significant driver of transaction volumes on Solana. However, as interest in speculative assets waned, it had a direct impact on transaction activity. Similarly, DeFi applications on Solana saw reduced user engagement, further exacerbating the decline in network activity.

Solana: Declining Active Addresses and Transactions (Credit: Artemis)

Key Fibonacci Level Rejected, Signaling Further Downside

A technical analysis of Solana’s price action showed a clear rejection at the 50% Fibonacci retracement level from the March 9 low to March 13 high.

The latest price move failed to pierce through the $146.5 resistance, which was a key level to watch for a potential breakout. In classical technical analysis, the failure to break above a key retracement level often signaled the continuation of the existing trend—in this case, a downtrend.

This rejection suggested that SOL could be poised for further downside. Momentum indicators were also aligning with this bearish outlook. The Relative Strength Index (RSI) just tagged the signal line, and the MACD histogram showed three consecutive lower readings, indicating fading positive momentum.

If the sell signal is confirmed, the first downside target for SOL could be around $110, which corresponded to its nearest lower low. However, given the textbook Fibonacci retracement pattern observed, the possibility of a drop below $100 was also on the table. A deeper retracement would further confirm that bearish momentum was firmly in control.

Fear and Greed Index Reflects Negative Market Sentiment

The crypto Fear and Greed Index stood at 33, which fell into the “Fear” category. While this was an improvement from recent extreme lows, it still signaled that investors were largely operating with fear.

A market operating under fear-driven sentiment experienced reduced buying interest, making it more challenging for assets like Solana to mount a sustained recovery.

Short-Term Rebound Presents Opportunities for Short Sellers

Although the daily chart displayed a strong bearish bias, the hourly chart showed that SOL was attempting to bounce off key support at $130.

The price appeared to be holding this level during the Asian trading session, and some indicators hinted at short-term bullish momentum.

For instance, the MACD histogram on the hourly chart had been forming higher lows, and the RSI was approaching its signal line from below. These signs suggested that an intraday bounce could be in the works.

However, given the prevailing bearish conditions on higher timeframes, it was more likely that this bounce would be a retracement before the broader selloff continues.

Short sellers might find an opportunity to capitalize on this short-term bounce by entering positions around key Fibonacci retracement levels. If SOL retraced to the 23.6% or 38.2% Fibonacci levels from the March 9 low to March 13 high, they could place their shorts with a high risk-reward ratio.

Based on the chart’s take-profit area, the risk-reward ratios for this trade