Since dropping from $160 on September 30, the price of Solana (SOL) has continued to hit new lows. Recent data suggests that the token could fall to a region it hasn’t reached in nearly a month.

At the time of writing, Solana is priced at $135.52. But with a bleak outlook, here’s why SOL may fail to make a quick recovery.

Buying Solana now seems risky

Data from crypto intelligence platform Messari shows that Solana’s Sharpe ratio has fallen. The Sharpe ratio measures a cryptocurrency’s potential risk-adjusted return.

When it goes up, it implies that the investment potential in the asset may be worth the risk. But for Solana, the index has fallen to -1.11. Five days ago, this same metric had a reading of 2.57, which suggested a possible increase in the price of SOL.

Read more: How to make money with cryptocurrencies

Currently, the index is on the verge of falling into negative territory, this suggests that buying SOL at the current value may not yield a positive return on investment.

In addition to this metric, the Chaikin Money Flow (CMF) is another indicator that reinforces the bearish thesis. The CMF considers the bullish or bearish volume at the end of a trading day.

Solana Sharpe Ratio. Source: Messari

With this data, the indicator can indicate whether the market is accumulating more of a token or distributing it.

When the CMF rises, accumulation occurs. On the other hand, a falling reading of the indicator suggests distribution. According to the SOL/USD daily chart, the CMF has fallen into the negative region, suggesting that sellers are dominant, and the Solana price may avoid a quick bounce.

Solana Chaikin Money Flow. Source: TradingView

SOL Price Prediction

On September 30, Solana was priced at $158.53, with expectations high that October would bring further gains. But since then, SOL has lost nearly 15% of its value and is currently trading at $135.52.

According to the daily chart, SOL failed to hold the $142.21 support, so the token fell below that threshold. Currently, the altcoin is on the verge of reaching the 23.6% Fibonacci retracement.

If this happens, Solana price could hit $130, possibly falling below the zone in the near term. Failure to hold the $130 support line could lead SOL down to $124.92.

Solana daily price analysis. Source: TradingView

On the other hand, if the bulls defend the $130 region, this prediction may not come true. Instead, the SOL price could jump to $161.95.

The article Solana (SOL) Indicates Levels Below $130 appeared first on BeInCrypto.