Solana (SOL), a crypto that once soared to over $250, is hitting turbulence. Crypto analysts are sounding the alarm, suggesting the price could plummet to $125 if key support levels fail to hold. Currently trading around $172, Solana is struggling to break free from persistent selling pressure.

Market watchers like best_analysts on X (formerly Twitter) point to the $200 price level as a tough barrier for Solana. This resistance zone is only adding fuel to the bearish mood in the market.

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Solana's price could drop to $125 if it breaks a key support level, as predicted by Mad Whale analysis.

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— Crypto | #1 Free Signals (@best\_analysts) February 19, 2025

Source: X

After a 15% drop over just four days, Solana seemed to stabilize around $170 on Wednesday. However, don't get too excited just yet! Transaction volumes are shrinking, which means traders aren't rushing in to buy the dip. Plus, with the U.S. SEC giving the nod to Litecoin (LTC) and XRP ETFs, investor attention has drifted away from SOL, leaving it in a vulnerable spot.

Technical Indicators Flash Red for Solana

Looking at the charts, things aren't looking too rosy for Solana in the short term. Technical indicators are suggesting more price dips could be on the horizon.

Solana price chart showing downtrend.

The Relative Strength Index (RSI) is hovering around 30, close to "oversold" territory. The Money Flow Index (MFI) is also weak, indicating not much new cash is flowing into Solana. And to top it off, the Moving Average Convergence Divergence (MACD) has turned negative, confirming the bearish momentum. In simple terms, these indicators are like flashing red lights for Solana's price.

However, some traders are spotting a glimmer of hope! A divergence on the 4-hour RSI – where the price makes new lows but the RSI makes higher lows – could signal that selling pressure is weakening. If Solana can break above the $173 resistance, we might see a recovery attempt, with targets around $195.81 and even $216.90. But for now, this is just a possibility, not a guarantee.

Source: Tradingview

Despite Solana's tech upgrades in 2024 – like the Firedancer validator client and the upcoming Token-22 update – these haven't translated into price stability yet. Analysts are still cautious, especially with a massive $1.6 billion worth of SOL tokens set to be released in March. This could bring even more selling pressure if market conditions remain weak.

On-Chain Activity Dries Up

Adding to Solana's woes, decentralized exchange (DEX) trading volume on the network has slumped to a five-week low of $2.61 billion – a 28% drop in on-chain transactions. This decline reflects broader market jitters, and SOL itself has lost 14% in February alone. Historically, big movements of SOL into exchanges often precede price drops, and current data shows significant withdrawals, hinting at potential sell-offs.

Network activity overall is down a whopping 55%, mainly due to fewer active users. Investor confidence has also taken a hit from recent rug pulls (scams) involving meme coins like $LIBRA, $TRUMP, and $Millenia, raising security concerns in the Solana ecosystem. And with 11.2 million SOL tokens from the FTX bankruptcy estate about to be released, investors are bracing themselves for potentially more downward pressure on Solana's price in the near future. Buckle up, SOL holders!