Solana (SOL) price plummeted over 20%, trading at $141.93, despite being announced as part of a strategic reserve. The sharp drop questions whether the bullish outlook remains intact after this news.
After reaching a daily high of $179.53, Solana fell to a low of $140.21, erasing gains from previous sessions. Key support levels around $155 failed to hold, triggering a stronger decline.
Historically, this price range acted as resistance in August and September, making it a critical area. Despite the drop, trading volume surged, indicating strong market activity.
Technical indicators show mixed signals where the Bollinger Bands suggest heightened volatility, while moving averages show downward pressure. If Solana recovers above $155, bullish momentum could return.
Solana price action chart | Source: TradingView
However, failing to hold current levels may lead to further declines toward $128. Investors remain cautious, balancing Solana’s long-term potential with short-term price fluctuations. The coming days could determine if this drop is a temporary setback or a trend reversal.
Solana Price’s Strong Liquidity Zones
Further analysis showed Solana is encountering key liquidity zones, with strong resistance near $183 and $165.
The price action suggests these levels are critical for determining SOL’s next direction, as large liquidity clusters influence market movement.
Recently, SOL reached a high of $183.32 before experiencing selling pressure that pushed it down. The price briefly tested $165.69 but failed to hold, leading to a drop toward $155.
The heatmap indicated a high concentration of liquidity between $183.5 and $183.7, which could act as a strong barrier to upward movement. On the downside, liquidity accumulation is visible around $150 and $155, signaling buyer interest.
SOL liquidation heat map chart | Source: Cache Trading
If SOL maintains support above $155, it may attempt to reclaim $165. However, failure to hold could drive prices lower, potentially testing the $140 level.
Overall, SOL’s price movement depends on whether it can overcome resistance at $165 or break past $183.
A decisive move beyond these levels will determine whether the current trend continues or reverses.
SOL Crowd vs Smart Money Sentiment
Solana price is witnessing a split in market sentiment. While the general crowd remains bullish, institutional or “smart money” investors continue to show a bearish outlook. This divergence suggests different expectations for SOL’s future price movement.
The crowd sentiment gauge stands at 1.14, indicating retail traders are optimistic about SOL’s price potential.
This sentiment often drives short-term rallies, as increased buying interest from retail traders supports price gains.
However, enthusiasm alone may not be enough to sustain a strong uptrend. Meanwhile, the smart money sentiment gauge reads -1.65, revealing that institutional investors and experienced traders are more cautious.
SOL crowd sentiment vs smart money sentiment | Source: Market Prophit
This negative sentiment suggests large investors expect price weakness or are waiting for better buying opportunities.
Historically, when smart money turns bearish while retail remains bullish, it can signal upcoming price corrections.
For SOL, this contrast in sentiment creates uncertainty. If retail momentum prevails, SOL could push higher.
However, if institutional investors maintain control, the market may see increased selling pressure before any sustainable recovery.
