Solana (SOL) price is down today, dropping 9% on November 26, amid a broader cryptocurrency market correction. SOL which reached an all-time high on November 23, has been unable to sustain its upward momentum, trading at $230. Several factors, including market-wide sell-offs, declining Solana-based token values, and bearish technical indicators, are contributing to the current downward pressure.
Market-Wide Correction Impacts SOL Price
The cryptocurrency market is experiencing a significant sell-off, with Solana joining other major cryptocurrencies in posting losses. Bitcoin (BTC), the market leader, dropped 5.8% over the last 24 hours to trade at $92,536, failing to surpass the $100,000 resistance level. Similarly, Ether (ETH) fell 1.2% to $3,360, while other top cryptocurrencies like BNB, XRP, and Dogecoin (DOGE) also recorded declines.
The total cryptocurrency market capitalization fell by 5% over the past 24 hours to $3.2 trillion, signaling a broad market cooldown after an overheated rally. Analysts attribute the sell-off to high leverage levels, with CryptoQuant analyst MAC_D noting:
“This correction occurred due to leverage overheating, as open interest and estimated leverage ratio reached annual highs.”
Declining Solana-Based Token Performance
Solana’s native token is facing additional bearish pressure due to underperformance in Solana-based ecosystem tokens. The total market capitalization of Solana-based tokens dropped from $347.8 billion on November 25 to $228.8 billion on November 26, a staggering 34% decline. Trading volume for these tokens surged by 43.2% during the same period, indicating heightened sell-side activity.
The sharp drop in the value and activity of Solana-based tokens likely discouraged investor confidence, contributing to the decline in SOL’s price.
Bearish Divergence in RSI
A bearish divergence between SOL’s price and its Relative Strength Index (RSI) signals a weakening uptrend. Between November 8 and 26, SOL's price achieved higher highs, while its RSI formed lower highs, a classic technical indicator of weakening momentum.
Additionally, SOL entered overbought territory on November 22 when the RSI hit 77, prompting profit-taking and buyer exhaustion. If selling pressure continues, SOL price could test support levels at $210 or potentially dip further to $185.
Outlook for SOL Price
Despite the current correction, analysts believe Bitcoin’s potential to breach $100,000 could lift altcoins, including Solana, in the coming weeks. However, Solana's price recovery will likely depend on broader market stabilization and renewed strength in its ecosystem tokens, according to Cointelegraph.
