Solana Risks 30% Drop as Price Breaks Key Support Level

Solana’s recent price action has triggered significant concern among technical analysts as the cryptocurrency broke below its crucial $170-$180 support zone for the first time in months, reaching a new local low of $165. This breakdown occurred amid broader market volatility that saw Bitcoin retreat to the $107,000 mark, dragging SOL below a key technical level that had previously served as reliable support. The cryptocurrency had been trading within a $175-$250 range following its August breakout, having reached a multi-month high of $253 during September’s rally before retracing nearly 35% to current levels.

Analyst Ali Martinez has been particularly vocal about the risks, highlighting Solana’s macro range between $100-$260 and emphasizing that the cryptocurrency must reclaim $200 to demonstrate strength. Martinez had previously warned that a confirmed breakdown from the $180 level would set the stage for further losses, and the recent breach appears to validate those concerns. According to his analysis, the next immediate support sits around the $158 area, which marks the mid-zone of the macro range and served as a key support and resistance level during early Q3 and last November’s breakout.

However, Martinez considers the most critical support “sits much lower” at approximately $115, representing a potential 30% decline from current levels if Solana fails to bounce and reclaim $180. This bearish perspective is echoed by analyst DonAlt, who advised maintaining “a bearish bias between here and $210” while being prepared to “aggressively flip” if SOL manages to overcome the $210 resistance level. The technical picture suggests that despite multiple attempts, SOL has consistently failed to successfully reclaim the psychologically important $200 barrier since its October correction.

Despite the bearish technical signals, some market participants view the current pullback as a necessary and healthy correction within a broader bullish context. Trader Elite Crypto characterizes SOL’s recent decline as “a healthy correction after months of upward movement” and notes that the cryptocurrency continues to hold a major ascending support zone that has served as a crucial bounce point since 2023. This perspective suggests that the current weakness represents a clean retest setup within long-term support rather than the beginning of a sustained downtrend.

Based on this analysis, Elite Crypto expects Solana’s price to retest the $158 area before initiating its next leg upward, maintaining an overall bullish stance on SOL despite the current price action. The repeated testing of the $170-$180 mark as support following the early October correction to $168, with successful bounces from this area each time until the recent breakdown, provides some technical basis for this optimistic interpretation. The fundamental argument rests on the idea that extended periods of upward movement naturally require consolidation phases to establish stronger foundations for future advances.

Adding complexity to the technical analysis is the substantial institutional interest demonstrated through recent ETF developments. Bitwise CEO Hunter Horsley has highlighted the significance of the asset management firm’s recently launched SOL Staked Exchange-Traded Fund, which “opened a bridge to Solana for many investors” who previously lacked direct exposure. The timing of this launch coincides with the second wave of crypto-based ETFs beginning trading last week, creating a fascinating contrast between short-term price weakness and long-term institutional adoption.

The performance of these new investment products has been notably strong, with the SOL-based ETF attracting $400 million in inflows during its first four days of trading. According to Bloomberg analyst Eric Balchunas, this represented leadership “by a country mile in weekly flows” among all crypto exchange-traded products. Horsley emphasized that “ETF investors tend to be long term oriented,” suggesting that despite current price volatility, the cryptocurrency is expected to demonstrate overall bullish performance in the future based on sustained institutional participation.

As of current trading, SOL sits at $167, representing a 17% decline in the weekly timeframe. This positioning creates a tension between immediate technical concerns and longer-term fundamental strengths, with the market watching closely to see whether the $158 support level will hold or whether Martinez’s warning of a drop to $115 will materialize. The mixed signals reflect the broader cryptocurrency market’s ongoing evolution, where traditional technical analysis must increasingly account for structural changes in investor composition and product availability.