Solana Downside Risks To $100: Can $125 Support Hold?

With the $125 support zone under pressure, will Solana manage to bounce back despite the fall in active addresses?

As the broader market falls, the Solana price drops under the $130 mark, prolonging the bear cycle. Amid the growing sell-off, will Solana pull off a reversal from the $125 support zone?

Solana Under $130 Warns a Slip to $100

The Solana price trend continues on the bearish part, with a 20% drop in the past 11 days. With a single bullish candle in between, the intense selloff has finally broken under the $130 mark. 

Currently, the Solana price is trading at $127 following last night’s massive 5.53% drop. This puts additional pressure on the $125 support zone, which remains a crucial reversal spot. 

However, the recent selloff and the increasing chances of a death cross between the 50- and 200-day EMA warn of a breakdown rally. 

Multiple lower-priced rejection candles from this zone have led to a bullish reversal. However, a recurring pattern of double-top reversals prolongs the lower-high formations. 

This reflects the massive overhead supply in the Solana charts. Hence, despite the absence of a resistance trend line, the price trend acts similarly within a descending triangle. 

Meanwhile, the daily RSI line supports the idea of a double-bottom reversal with a bullish divergence in the last two depths. 

The Massive Addresses Drop

Over the last month, the active addresses quickly fall with the increased bearish activity in the Solana price trend and the broader market. 

The number of active addresses on the Solana Network dropped from 33.15 million in July to just 11.1 million in August. Moreover, the daily active addresses dropped under 1 million last month. 

Will Solana Sustain Above $125?

The breakdown rally in Solana can find support at $110 and the $100 psychological mark. 

The support zone has provided multiple support since early 2024 and has provided six reversal entries before. In case of a bullish reversal, the upside resistances are the 200-day EMA at $140 and the 50-day EMA at $147. 

Furthermore, the previous double-top peaks at $163 remain a crucial breakout spot to signal a trend reversal in Solana. As the past three double-top formations have yet to be broken, a breakout rally will result in a massive upside move.