Solana price remained under pressure this week amid the ongoing crypto market crash. It also plunged amid weakness in its ecosystem, including the plunging meme coin values. SOL token was trading at $184, down sharply from the September high of $253.
Solana Price Invalidates Bullish Pattern
The daily timeframe chart shows that the SOL price has come under pressure in the past few weeks. It plunged from a high of $253 to the current $184.
SOL price has moved below the 50-day Exponential Moving Average, a sign that the bearish momentum is continuing. It also moved below the lower side of the rising broadening wedge pattern, which is commonly known as a megaphone. This pattern is one of the most bullish ones in technical analysis.
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Solana price is also trading between the 50% and 61.8% Fibonacci Retracement levels. Also, popular oscillators like the Relative Strength Index (RSI) have continued falling.
Therefore, the Solana price will likely continue falling as sellers target the next psychological point at $150. This price target is about 18% below the current level. The bearish SOL price forecast will become invalid if it moves above the lower side of the wedge pattern.
Solana price chart | Source: TradingView
Solana Liquidations and Meme Coins Crash
The main reason why the Solana price has plunged in the past few weeks is the ongoing sense of fear in the crypto industry. Most recently, the coin suffered a big liquidation worth over $1.7 billion in a single day as the crypto market crashed. As a result, investors have largely remained in the sidelines since then.
Solana price has also plunged as demand for its meme coins has waned. Data shows that most of these tokens have plunged in the past few months. As a result, the market capitalization of all these tokens has dropped to over $7 billion, down from over $22 billion earlier this year.
The ongoing Solana meme coin crash has led to a big drop in activity of top platforms in its ecosystem like Raydium and Jupiter. For example, Jupiter, a top perpetual DEX has lost market share to platforms like Ordelrly, GRVT, Reya, Paradex, and Apex Protocol.
Also, Raydium, which dominated the DEX industry a few months ago, has lost market share to the likes of Uniswap and PancakeSwap. All this has led to lower fees in the Solana ecosystem.
Solana has also experienced weak inflows to the recently launched REX-Osprey Solana ETF. The fund now has $348 million in assets, down from what it had a few months ago.
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