Solana (SOL) Price Drops 9% Amid Broader Cryptocurrency Market Correction

SOL which reached an all-time high on November 23, has been unable to sustain its upward momentum, trading at $230. Several factors, including market-wide sell-offs, declining Solana-based token values, and bearish technical indicators, are contributing to the current downward pressure.

Solana (CRYPTO: SOL) price experienced a downturn on Saturday as part of a broader sell-off in the cryptocurrency market.

Solana Hit All-Time High Earlier This Week: SOL price reached an all-time high of $288 on Monday. The token has since faced selling pressure and dropped below the $250 level on Friday.

Solana Faced Several Bearish Factors: The cryptocurrency market experienced a sell-off on Saturday, with Bitcoin failing to cross the $100,000 resistance level. Several major cryptocurrencies posted losses, including BTC, ETH, BNB, XRP and DOGE.

The total cryptocurrency market cap dropped by 5% over the past 24 hours to reach $3.2 trillion, indicating a cooling down of the market after an overheated rally.

According to CryptoQuant analyst MAC_D, "This correction occurred due to leverage overheating, as open interest and estimated leverage ratio reached annual highs."

Solana Based Ecosystem Token Values Dropped: Solana's native token also faced bearish pressure due to underperformance in Solana-based ecosystem tokens.

The total market capitalization of Solana-based tokens decreased from $347.8 billion on Friday to $228.8 billion on Saturday — a 34% drop.

Solana token trading volume surged by 43.2% during this time, highlighting increased sell-side activity.

The sharp drop in the value and activity of Solana-based tokens may have discouraged investor confidence and contributed to the decline in SOL price.

Bearish Divergence in SOL RSI: A bearish divergence between SOL price and its Relative Strength Index (RSI) signaled a weakening uptrend.

From November 8 to 26, SOL price achieved higher highs, but its RSI formed lower highs, indicating decreasing momentum.

Solana encountered overbought territory on November 22 when the RSI hit 77, leading to profit-taking and buyer exhaustion in the market.

If selling pressure continues, SOL price could test support at $210 or potentially dip further to $185.

Solana Price Outlook: Despite the current correction, analysts believe Bitcoin's potential to breach $100,000 could lift altcoins, including Solana, in the coming weeks.

However, Solana's price recovery will likely depend on broader market stabilization and renewed strength in its ecosystem tokens, according to Cointelegraph.