Solana Faces Ongoing Pullback as Traders Place $1.2 Billion Bet on a Dip

Solana's recent momentum appears to have slowed. After a strong rally in the past month, with more than 20% gains, the token has faced a considerable drop in the last week. With a nearly 9% decline, Solana is currently trading around $181, well off its recent highs.

While many expect this cooling off to be just a natural correction, on-chain data and market sentiment suggest that further losses may be in store.

Bearish Signals from SOPR and Liquidations

Solana’s recent price drop is accompanied by some concerning signs, particularly from the Spent Output Profit Ratio (SOPR). This metric measures whether tokens are being sold for a profit or a loss, and recent trends show a clear change. Over the past week, the SOPR decreased from 1.04 to just below 1.00, indicating that those selling are nearly breaking even.

When fewer people are profiting from their sales, it typically signals weakening market confidence. The drop in SOPR suggests not just hesitation but also the potential for panic, as it aligns with the price decrease.

In addition to this, liquidation data is also pointing to bearish pressure. In the past seven days, short positions on Solana have surged to $1.28 billion, surpassing the $924 million in long positions. This shift highlights the growing belief among traders that the token's price will continue to dip in the near term.

Weakening Bullish Momentum

Another troubling sign for Solana bulls is the Bull-Bear Power Index, which tracks the strength between buyers and sellers. It’s been on a downward trend, indicating that buying pressure is fading. Fewer buyers are entering during dips, which lowers the chances of a fast recovery.

While this slowdown doesn’t mean the end of Solana’s long-term prospects, it does suggest that the token’s price could stay level or decrease in the near future. If buying interest doesn’t pick up, Solana may struggle to regain its upward movement.

Key Price Levels to Watch Now

From a technical standpoint, Solana’s price action suggests that $175 is a critical support level to watch. After peaking at $206, it has retraced to around $181, and the $175 mark aligns with the 38.2% Fibonacci retracement level from its recent low of $125. If Solana can hold above this level, there’s potential for the price to trade within a range before attempting another rally.

Nevertheless, if the price breaks below $175, the outlook shifts to a bearish one. A bigger correction might follow, with short positions still rising. Traders will pay attention to these levels to figure out if Solana can recover or if more downside is expected.

What’s Next for Solana?

Solana’s pullback has some wondering where it’s headed next. The market remains positive, but more losses are possible before it rebounds. Traders should watch the $175 level to see if it holds or drops further. Solana looks good in the long run, but a cautious approach could be wise right now.

Solana’s outlook will depend on the next few days. If the support level remains stable, a recovery is possible. On the other hand, if the bearish trend persists, further losses could be ahead before a possible reversal.