Solana (SOL) risks 30% drop after losing critical $118 support

The crypto market faced a slump, intensifying selling pressure on Solana [SOL] as trader and investor sentiment turned increasingly bearish.

Within this broader sell‑off, SOL was hit the hardest. It lost a key support level at $118, which it had successfully defended since March 2024.

Adding to the bearish outlook, a newly created wallet deposited 2 million USDC on the Hyperliquid DEX and opened multiple short positions. This reflects the current market outlook, according to the crypto tracker Onchain Lens.

Further analysis of the whale’s activity shows that it has opened a massive SOL short position worth $6.15 million at the $122.91 level.

This sell-off is not limited to the crypto market alone; it has also been observed on Wall Street.

According to on-chain analytics platform SoSoValue, U.S.–based Solana spot exchange-traded funds (ETFs) recorded a significant outflow of $2.22 million. This suggests that investors and institutions are withdrawing capital from the underlying asset.

Source: SoSoValue

Both developments highlight market sentiment toward Solana, and their impact is reflected in the asset’s price.

Solana price action and key levels 

At press time, SOL plunged 6.65% over the past 24 hours and was trading near $115.

Despite the price decline, market participation surged significantly, with SOL’s trading volume jumping 105% to $7.60 billion during the same period. This indicates strong interest from traders and investors, leading to heavy market participation.

Looking at the price charts, it appears that SOL has lost one of its strongest key support levels at $118, which it had been holding since March 2024.

On the weekly chart, the asset had previously rebounded from this support more than ten times, but SOL has now failed to hold it.

Source: TradingView

On the daily chart, price action suggests that SOL could see a strong downside move, potentially declining by 30% and reaching the $78 level in the coming days.

However, this outlook would only be validated if the asset remains below or closes a daily candle under the $118 level.

Source: TradingView

Technical indicators, including the 50-day Exponential Moving Average (EMA) and the Average Directional Index (ADX), support SOL’s bearish outlook.

Notably, SOL was trading below the 50 EMA, indicating that the asset is bearish in the short term.

Meanwhile, the ADX, which measures the strength of the current trend, had risen to 33, above the key threshold of 25, suggesting that SOL is experiencing a strong directional trend.

Traders eye short-leveraged positions

From a derivatives perspective, traders appear to be strongly positioned on the bearish side.

According to CoinGlass data, intraday traders are closely monitoring two critical price levels. On the downside, the focus is on $112.8, while on the upside, attention centers around $120.2.

At these levels, traders have established significant leveraged positions. Short‑leveraged positions total $55.15 million, while long‑leveraged positions are far larger, amounting to $241 million.

This positioning highlights the market’s current tension, with traders preparing for sharp moves in either direction.

Source: CoinGlass

This positioning clearly reflects how intraday traders are viewing SOL at the moment.

Final Thoughts

• Bearish activity from market participants has strengthened Solana’s negative outlook.
• Price action suggests that another 30% drop in SOL could be on the cards if the asset remains below the $118 level.