Will Support at $110 Hold?

Amid the broader market correction and declining volumes, will Solana crash under $110?

In a broader market correction, as Bitcoin price falls under the $58,000 support level, the supply pressure in the altcoin market is increasing. Amid the massive correction, the Solana price has dropped below the $130 mark. 

Will the declining trend in Solana result in a price drop under $110? 

The Downfall in Solana

In the recent correction phase, Solana formed eight consecutive bearish candles, accounting for a price drop of 20%. Today, it is down by 0.39% and on its way to making the ninth consecutive bearish candle.

In the 4-hour chart, the downfall leads to the generation of a resistance trend line. However, the recent lower-low formation projects a bullish divergence in the 4-hour RSI line. 

This increases the possibility of a bull cycle challenging the overhead trend line. However, the increased bearish influence has resulted in a death cross in the 50 and 200 EMAs in the 4-hour chart. 

Shrinking On-chain and DEX Volumes 

The Solana network is feeling the pinch of the bear market, with on-chain volumes experiencing a significant decline. As participants exit the on-chain ecosystem, Solana’s volume has plummeted to one of its lowest points in history.

Market watchers have observed that the network’s on-chain volumes were even higher when SOL’s price was under $20 compared to its current levels.

According to DeFiLlama, the volume of decentralized exchanges (DEXs) on Solana has decreased by 19% over the past week, reaching $539 million.

For context, the daily volume on Solana has plummeted by over $3 billion compared to the start of March 2024. Specifically, the DEX volume has shrunk from over $3.8 billion to a mere $539 million, marking a staggering decline of over 87%.

Moreover, the total on-chain volume has dropped to $6 billion over the same period, highlighting the network’s current struggles.

Where is Solana Headed?

Based on the Fibonacci levels over the early August correction phase, Solana is headed toward the 23.60% level at $125. The next support level for Solana stands at $115, and the base level of $110. 

On the flip side, if the altcoin manages to restart a bull cycle, the resistance levels above the trend line are at 38.20% and 50% Fibonacci levels at $136 and $145, respectively. Meanwhile, the declining 50 EMA could act as a dynamic resistance in between.