TLDR
- Solana (SOL) price dropped 10% from $185 to current levels around $160-167 after failing to break above $180 resistance
- SOL faces pressure from 3.55 million token unlocks worth $600 million scheduled between June and August
- Memecoin prices are declining with TRUMP down 24%, FARTCOIN and POPCAT down 20%, and PENGU down 17%
- Solana maintains strong fundamentals with $94.8 billion DEX trading volume surpassing Ethereum’s $64.8 billion
- Technical analysis shows key support at $160 level with potential further decline to $142 if broken
Solana price has entered a fresh decline phase after failing to sustain momentum above the $180 resistance level. The altcoin dropped 10% following a sharp rejection at $185 on May 23, bringing SOL to its lowest point in over a week at $167.
The cryptocurrency started its latest downward move from the $180 zone against the US Dollar. SOL price broke below the $170 support level and traded as low as $160 before attempting a recovery.
Current technical indicators paint a bearish picture for the short term. The price is trading below the 100-hourly simple moving average with a connecting bearish trend line forming resistance at $170.
SOL recently managed to move above $165, surpassing the 23.6% Fibonacci retracement level of the recent decline. However, the recovery faces resistance near $169 and the trend line, close to the 50% Fibonacci retracement level.
Technical Levels Point to Continued Pressure
The main resistance remains at $180, with the next key level at $185. A successful break above $180 could open the path toward $200, but current momentum suggests this scenario remains unlikely.
On the downside, initial support sits near $162, followed by major support at $160. A break below this level could send SOL toward $155, with further weakness potentially targeting the $142 support zone.
The hourly MACD indicator is gaining pace in the bearish zone while the RSI remains below the 50 level. These technical signals support the current downward pressure on the token.
Despite the price decline, Solana maintains strong network fundamentals. The blockchain holds the second-largest position by total value locked at $11 billion, representing a 14% increase over the previous month.
Token Unlocks and Memecoin Weakness Add Pressure
Trading volume on Solana’s decentralized exchanges reached $94.8 billion over the past 30 days, surpassing Ethereum’s $64.8 billion in onchain activity. Solana also generated $48.7 million in fees compared to Ethereum’s $36.9 million despite having a smaller deposit base.
The anticipated unlocking of 3.55 million SOL tokens between June and August represents a major concern for investors. These tokens, valued at approximately $600 million at current prices, were acquired from the bankrupt FTX/Alameda estate at around $64.
Memecoin performance has also deteriorated, adding pressure to SOL price. Official Trump (TRUMP) dropped 24% over the past seven days while FARTCOIN and POPCAT lost 20% each. Pudgy Penguins (PENGU) fell 17% during the same period.
The decline in memecoin interest poses risks for Solana’s growth potential since these tokens drive significant trading activity on the network. A sustained drop in DEX activity would likely pressure SOL’s performance further.
Solana’s supply expands at an annualized rate of 5.2%, which reduces the net staking return despite offering an 8% yield for validators. This compares unfavorably to yields offered by many DApps on stablecoin deposits.
The network also faces MEV (maximum extractable value) issues, with validators able to increase earnings by reordering transactions. This practice enables sandwich attacks and front-running that harm regular traders.
Current market conditions suggest SOL faces multiple headwinds including technical weakness, upcoming token unlocks, and declining memecoin performance that could limit near-term upside potential.
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