Solana (SOL) Price Rally in Deep Trouble–May Plunge Below $170 Soon

Solana is facing a tough battle below $200, down almost 17% from the monthly highs above $220. After multiple failed attempts to break key resistance levels despite the previous bullish momentum, the SOL price is now feared to plunge below the multi-month support level, raising concerns over the upcoming price action. 

One of the major reasons for the downfall is controversy surrounding the ecosystem with scams linked to memecoins like LIBRA, Pumpfun, and Meteora, leading to community concerns. 

The immense hate towards the memecoins has badly affected the Solana ecosystem, including the SOL price. The total value locked (TVL) has slashed from the highs above $12 billion to $8.9 billion; volume plunged from $35 billion to as low as $2.5 billion, while the number of transactions continues to grow. 

The above data from Defilama suggests that traders are uncertain about the next price action. The drop in volume suggests there is less demand for the token, while the rise in the transaction suggests a rise in the individual transactions. Besides, the open interest (OI) has also dropped from $6.5B to $4.1B ever since the price faced rejection from its ATH at $296, validating the uncertainty among the market participants. What’s next? Can the Bulls manage to defend the support at $180?

Solana (SOL) Price Analysis

Solana Price has been one of the strongest cryptos that has maintained a substantial trend for a long time. Meanwhile, the rise of the memecoins on the platform has circulated bearish waves over the token. The SOL price has broken down from pivotal support, which does not appear to be a part of a healthy ascending trend. 

The above chart flashes massive bearish signals for the SOL price rally. The price is about to validate a breakdown below the crucial 200-day MA at $183.47 and the OBV is maintaining a descending trend, forming lower highs and lows. The price drop accumulated with a bearish OBV confirms the bearish divergence. Hence, the token that just slipped out of the top 5 is expected to enter the pivotal resistance zone between $181.99 and $178.50. 

If the bulls fail to hold within the range, a drop below $170 could be imminent for the Solana (SOL) price rally ahead this week. 

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