Solana Price Prediction: SOL Key Indicators Strengthen Bearish Momentum, Shorts Set Their Sights on the $160 Mark

The price of Solana (SOL) continues to fall, breaking below $180 during the Asian session today (25th), after closing below a key support level the previous day. This price pullback of SOL has triggered a wave of liquidations, with over $57 million liquidated in the past 24 hours, of which 86.79% were long positions. In addition to this bearish outlook, on-chain data indicates that short positions are dominating, suggesting further pullbacks may occur in the future.

Why is SOL falling?

Solana started the week strongly, reaching a high of $205.34 on February 14. However, midway through the week, the stock failed to maintain this bullish momentum, having declined nearly 12% by Thursday.

Data from Coinglass shows that the significant fall in SOL prices has triggered a wave of liquidations, with a total of $101.38 million in leveraged positions liquidated from Wednesday to early Friday. Additionally, over $57 million in positions were liquidated in the past 24 hours, of which 86.79% were long positions, indicating an overly bullish market.

(Source: Coinglass)

As shown in the figure below, CryptoQuant data indicates that the selling pressure of SOL has increased. The Taker CVD (Cumulative Volume Delta) of SOL turned negative on Wednesday, showing that short positions are gaining control of market momentum. This indicator measures the cumulative difference between market buy and sell volumes over a three-month period. When the 90-day CVD is positive and continuously increasing, it indicates that Takers are in a buying-dominant phase; whereas when the 90-day CVD is negative and continuously decreasing, it indicates that Takers are in a selling-dominant phase. If this ongoing downward trend continues, the price of SOL may further fall.

(Source: CryptoQuant)

Worse still, on Wednesday, the law firm Burwick Law filed a class action lawsuit against the memecoin creator Pump.Fun located in Solana in the Southern District of New York.

Burwick Law stated, "We have filed an amended complaint on behalf of the plaintiffs in Aguilar v. Baton Corp against PumpFun, Solana, Jito, and their respective executives, alleging violations of the Racketeer Influenced and Corrupt Organizations Act."

The lawsuit claims that PumpFun is merely a front for a slot machine cabinet, which is part of a broader illegal gambling and money transfer scheme co-designed and maintained by Pump.Fun, Jito Labs, Jito Foundation, Solana Labs, and Solana Foundation.

SOL Price Analysis

SOL rebounded in price earlier this week, reaching a high of $205.34 on February 14th on Tuesday, but then faced resistance and fell back. Over the next two days, the cryptocurrency dropped nearly 12%, closing below the daily support level of $184.13 on Thursday. As of Friday when this article was written, the cryptocurrency was still down around $178.81.

If SOL continues to pullback, it may extend the fall and retest the next daily support level of $160.

On the daily chart, the Relative Strength Index (RSI) is at 56, significantly retreating from Tuesday's overbought level, indicating that the bullish momentum is weakening. In addition, the Moving Average Convergence Divergence (MACD) indicator is also converging, and the green histogram is declining, further indicating that the bullish momentum is weakening.

If SOL rebounds and closes above the daily resistance level of 184.13 USD, it may continue the rebound momentum until the next resistance level of 205.34 USD.

(Source: Trading View)