Solana price dropped into a local bear market as the crypto sell-off intensified this week.
Solana
sol3.96%Solana, the fifth-largest cryptocurrency, has fallen by 20% from its highest level this year, reducing its market cap to $102 billion.
The decline coincided with a broader downturn in its ecosystem. Meme coins like Dogwifhat, Bonk, Popcat, and Peanut the Squirrel plunged by over 20% in the last 24 hours. The total market cap of SOL-related meme coins has fallen to $17.7 billion.
Solana’s retreat also mirrored declines in other layer-1 and layer-2 cryptocurrencies like Avalanche, Ethereum, Arbitrum, and BNB. Historically, cryptocurrencies have demonstrated a strong correlation with one another during market shifts.
Therefore, the question among most analysts and investors is whether this is a temporary pullback or the start of a new bear market.
In an X post, McKenna, a crypto analyst with over 93,000 followers, declared himself a “Solana giga bull,” predicting the coin could jump to $500. He pointed to a forming cup and handle pattern on the monthly chart as the basis for his bullish outlook.
I am now a Solana giga bull.
Permission to send this to $500 with haste.$SOL pic.twitter.com/f5O8RfZgLP— McKenna (@Crypto_McKenna) December 9, 2024
Jelle, another popular crypto analyst, pointed to the same formation on the weekly chart and predicted that it would jump to $600. A rally from the current level to $600 implies a near 200% jump.
Solana has some of the best fundamentals in the crypto industry. It has become the favorite blockchain for developers building meme coins and other types of dApps. The network has collected over $660 million in fees this year.
Solana has over $8 billion in total value locked, while its stablecoin volume has exceeded $24.8 billion. Additionally, Solana has emerged as the leading chain for decentralized exchanges, recording a 30-day trading volume of over $151 billion—nearly double that of Ethereum.
Solana price point to more gains
The weekly chart shows that SOL has pulled back sharply over the past few weeks, dropping to a key support level at $206, the upper boundary of a smaller cup and handle pattern. This movement suggests that Solana may be forming the handle portion of a larger C&H pattern.
The depth of the cup measures approximately 97%. Based on this pattern—a bullish continuation signal—there is a possibility that SOL could climb to $520. This target is about 97% above the cup’s upper boundary at $263.