Solana (SOL) Dips Below $200 Despite Strong Network Activity, Will It Recover?

Solana (SOL) recently dropped to $197, showing a loss of 8.68% in just one day. However, trading volume went up by 94%, indicating strong interest in the coin.

Solana’s price dropped to $197.05, but it still gained 4.31% over the past week. The coin traded between $193.90 and $215.98 on the last day. Over the week, the price ranged from $188.79 to $221.35.

Right now, SOL’s market cap is $95.54 billion, with 480 million SOL in circulation. It’s still 24.9% below its all-time high of $263.21, which it reached in November 2024. The next major resistance is at $217, while support at $195 is critical to prevent further drops.

Solana Indicators Show Bearish Momentum

Solana’s recent price action on the daily chart shows bearish momentum. It recently broke below a bullish trendline and a key zone called the Fair Value Gap (FVG), which usually leads to traders returning to the market to fill the price gap.

The 200-day Moving Average (MA) at $217.96 is acting as strong resistance. If the price fails to cross this level, it could indicate a bearish trend.

The closest support is at $195.72. If the price falls below this, it could drop further to $180. Traders are keeping an eye on whether SOL can regain $200 and aim for $220. If the bearish trend continues, the price could test even lower levels.

What Are Traders Watching?

According to Coinglass, traders’ feelings were mixed. Trading volume jumped by 94.85%, reaching $12.62 billion. However, Open Interest (OI), which tracks active trades, dropped by 10.68% to $6.03 billion. This means fewer traders are using leverage to bet on price movements.

Options trading also saw a big jump, with activity increasing by 447.63%. Still, $10.62 million worth of long positions (bets on the price rising) were liquidated when the price fell. In comparison, $4.64 million in short positions (bets on the price dropping) were liquidated. Most of these losses happened on Binance and Bybit exchanges.

Strong Network Activity Supports Solana

Despite the price drop, SOL’s network activity remained strong. According to DefiLlama, its Total Value Locked (TVL) is $8.79 billion, though it fell by 7.59% in the last day. The stablecoin market on SOL is worth $5.56 billion.

The network earned $4.35 million in fees and $2.18 million in revenue in just 24 hours. SOL also recorded 4.74 million active addresses and over 62 million transactions in the same period.

Will Solana Recover?

Solana’s network activity and high trading volume both show that interest in the coin remains strong. However, bearish indicators like falling support levels and liquidations suggest caution.

To recover, SOL must hold above $195 and break through $200. If it fails to do so, it could indicate a bearish trend and lead to further price drops. For now, the market remains uncertain. Traders are watching closely to see if Solana can stabilize and make its way back to $200 or higher.