Solana (SOL) Price Falls to $130, Flashes Similar Setup to 2022 Bear Market

Key Takeaways

• Solana’s price has fallen since September 2024 after a 43% monthly decline.
• The weekly chart shows a similar price action that saw SOL collapse to a single-digit value.
• Solana’s TVL has also plummeted from $12 billion, while the daily chart remains bearish.
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For the first time since September 2024, Solana’s (SOL) price has dropped to $130. This sharp decline comes after the cryptocurrency failed to notch a new all-time high.

Instead, the price dropped by 43% this month. Beyond the recent Solana price action, a historical pattern shows that a deeper pullback could be close as the technical setup appears similar to that of the 2022 bear market.

With market sentiment turning cautious, the question is—will SOL break free from this bearish cycle?

SOL Falls to 5-Month Low

Earlier in the year, Solana’s price flashed signs of reaching $300. But after hitting $294, the cryptocurrency encountered rejection.

Since that time, it has been downhill, with SOL failing to retest that peak. While SOL dropped below $130 today, the weekly chart shows that the altcoin could follow a similar path that saw the price collapse during the 2022 bear market.

During that period, Solana’s price, which reached $260 in November 2021, crashed below $10. It was also during that period that the 26-period Exponential Moving Average (EMA) crossed above the 12 EMA, which confirmed the extended bearish phase.

As of this writing, the same thing has happened as the 26 EMA (orange) has dropped below the 12 EMA (blue). If sustained, this crossover and the negative reading of the MACD, might suppress SOL’s price.

TVL Loses $5 Billion

Beyond the price, another sign that SOL could be heading toward the 2022 bear market path is its Total Value Locked (TVL).

In January, Solana’s TVL neared $12 billion. But today, it has dropped to $6.93 billion.

Taking it back to the 2021 to 2022 period, the same metric collapsed from $10 billion to a sub-$1 billion level within months. The TVL is a key indicator that shows how much confidence users have in a protocol.

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When the value rises, it indicates users are locking more assets into the protocol, signifying trust. However, in this case, the decline indicates that investor confidence in SOL is fading.

If the TVL continues to fall, Solana’s price is likely to follow suit. If that is the case, then SOL could fall much lower below $130.

SOL Price to Drop Below $110?

Looking at SOL’s price potential on the daily chart, CCN observed that the Relative Strength Index (RSI) has dropped to the oversold region.

While the RSI measures momentum, it also shows if a cryptocurrency is overbought or oversold. Readings above 70.00 means it is overbought, while those below 30.00 indicates that it is oversold.

As of this writing, the indicator’s rating is $25.42. It is also important to note that the RSI is yet to break above the downtrend.

If this remains the same, the Solana’s price could drop to $109.92 at the crest of the wick shown below.

If selling pressure increases and demand for SOL fails to pick up, this prediction could be worse.

If that is the case, SOL could decline to $78.91, which would represent a 13-month low.