After reaching an all-time high in December, Solana [SOL] has retraced, falling 18.18% over the past month.
However, as the asset has risen 7.09% over the past week and 5.42% in the last 24 hours, the situation seems to be changing.
Although bullish momentum is evident, uncertainty remains. The overall structure leans bullish, but recent selling pressure has raised questions about the sustainability of this trend.
Transaction volume has surged, but sellers dominate.
Transaction activity on the Solana network has surged, with a total of 66.9 million transactions executed in the past 24 hours. This trend is happening as the asset gradually recovers from its recent slump.
The surge in transaction volume may signal bullish or bearish sentiment, depending on whether market participants are buying or selling. To identify the trend, AMBCrypto analyzed Solana's net flow on exchanges.
Net flow on exchanges measures the difference between asset inflows and outflows on exchanges. Positive net flow indicates more selling activity, while negative net flow indicates dominant buying pressure.
As of now, Solana's net flow on exchanges is negative on both daily and weekly timeframes, indicating that buying activity exceeds selling activity.
In the past 24 hours, SOL worth $6.15 million has been sold, and in the past 7 days, SOL worth $75.18 million has been sold.
Despite buying pressure, the SOL price has increased by 5.42% in the past 24 hours, which seems fragile.
A close analysis of trading volume reveals that prices have dropped by 25%, indicating that the recent rise may lack sufficient market momentum to sustain.
Typically, when prices soar accompanied by declining trading volume, it indicates a temporary price rise lacking substantial market support.
Unless Solana's trading volume increases accordingly to support its price trend, the asset still faces the risk of further pullbacks.
Despite facing pressure, SOL still maintains bullish potential.
SOL has entered a key support area on the charts, trading within a bullish triangle structure.
The support level is between $188.89 and $173.24, an area historically associated with significant buying pressure, although such activity has not materialized yet.
If SOL breaks through this support area, it is likely to re-enter the consolidation phase it recently exited.
Conversely, if the support level becomes a catalyst for a rebound, the asset could see significant gains. This could push SOL to reach previous all-time highs, or even surpass them.