Solana (SOL) is facing downward pressure amid a general correction in the cryptocurrency market, raising investors’ concerns about the future of its price action. The recent decline suggests that investors are still in a fragile mood despite previous highs, which could be a sign of a shift in momentum.
“This correction is due to leverage overheating, as open interest and forecast leverage have reached yearly highs,” CryptoQuant analyst MAC_D explained.
The decline in Solana’s price comes as part of a larger correction, with Bitcoin struggling to break above the $100,000 resistance and the market overheating. Despite being the largest cryptocurrency by market cap, Bitcoin (BTC) has fallen by 5.8% in the past 24 hours, falling to $92,536.
Ethereum (ETH) also fell by 1.2% to $3,360, while other major cryptocurrencies such as BNB, XRP, and Dogecoin also lost value. This contributed to the overall market decline. The total value of the crypto market fell by 5% in the last 24 hours to $3.2 trillion. "Bitcoin's failure to break the 100K resistance reflects the general weakness of the market," analyst MAC_D commented.
As Bitcoin hits its resistance, altcoins are moving in the same direction. This correlation shows that investors are becoming more sensitive to Bitcoin’s market movements. This suggests that a sustained bear market could create increased volatility for altcoins, including Solana.
The negative sentiment around Solana’s price is deepening with the depreciation of Solana-based tokens. Many tokens developed on the Solana network have suffered significant losses, leading investors to take a cautious stance. The market value of Solana-based tokens, which was $347.8 billion on November 25, experienced a major decline, falling to $228.8 billion on November 26. This change indicates that trading volume increased by 43.2% and indicates high selling pressure.
The decline in the market value of Solana-based tokens has likely influenced the downward pressure on SOL’s price. The correlation between token performance and SOL price shows how interconnected the cryptocurrency markets are.
A rapid increase in trading volume in Solana-based tokens may reflect a change in market mood. Increased trading volume during declines usually indicates panic selling, as investors quickly sell their positions, fearing further losses.
Today’s SOL price decline coincides with a clear bearish divergence, which is also documented by the relative strength index (RSI) data. Historically, a decline in the RSI while prices are rising indicates weakening bullish momentum and a shift in investor behavior. Analysis shows that SOL price made higher highs between November 8-26, while the RSI made lower highs. This indicates buyer fatigue and could prompt traders to leverage their positions.
As the market correction continues, SOL may face additional selling pressure. Analysts suggest that if the bearish momentum remains strong, the price could drop to $210 or even $185.
Going forward, investors will carefully focus on technical indicators and price action to analyze whether SOL’s price can recover or face further corrections. Additionally, external factors such as market trends and regulatory developments will also be critical to assessing SOL’s potential recovery.