Solana Price News: SOL Pumped and Dumped in Record Time Today – Where to Next?

Solana (SOL) had a roller coaster today as the market pumped and dumped the token during the New York session, causing the price to break a key support that risks a much deeper correction.

The price has dropped by nearly 5% in the past 24 hours, and currently stands at $122. Trading volumes surged by 17% during this period, indicating a spike in trading activity as SOL broke below the $130 support again.

SOL/USD 15-Minute Chart (Coinbase) – Source: TradingView

The 15-minute chart shows how the price initially ripped through the Asian session’s high, but the selling pressure was rampant as SOL hit $134, causing a sharp drop to $122 in just two hours during the New York session.

This 9% decline in such a brief period can be partially attributed to underwhelming earnings reports from tech companies like Oracle, Nvidia, and Broadcom, as their stock all booked strong losses after the opening bell.

Traders’ Participation Dried Up After October 10

Long liquidations surged over $250 million in the past 4 hours as a result of this pump-and-dump.

Traders have been reluctant to jump back into the market recently as volatility persists. Open interest (OI) shows that participation plummeted after the October 10 flash crash.

Back then, OI levels were at $14.8 billion. At the time of writing, this metric sits at half that amount, showcasing the severe impact that $16 billion worth of liquidated long positions had on traders’ mindset.

It appears that this month’s interest rate cut was not enough to improve market sentiment, as the Fear and Greed Index currently sits at 25.

The kind of price action we saw today is exactly what traders fear as the market is behaving a bit erratically, even in the absence of news and catalysts that justify such moves.

Meanwhile, the Solana blockchain has experienced a big downturn in terms of usage since July, which explains why other altcoins like Ethereum (ETH) and BNB Chain (BNB) have performed much better this year.

Solana Weekly Transactions and Active Users – Source: Artemis

Weekly transactions seem to have peaked during the week ended on July 17, and started a controlled descent since then, moving from 816 million to 527 million as of last week.

Lower demand and trading activity on the meme coin segment justifies this downturn, as most tokens in this category have performed poorly this year. This also favors a bearish outlook for the token as it indicates an erosion in the network’s main use case.

SOL Breaks Below Key Support and Could Drop to $100

Looking at the daily chart, Solana (SOL) just broke below a key support area at $128, from which it had bounced multiple times in the past couple of months. This indicates that the selling pressure continues and favors a bearish outlook for the altcoin.

SOL/USD Daily Chart (Coinbase) – Source: TradingView

Meanwhile, the Relative Strength Index (RSI) sent a sell signal as it dived below the 14-day moving average, indicating that negative momentum is accelerating.

Sadly, this increases the odds of a move to $100, meaning an 18% downside risk from where SOL is trading right now. Even after three rate cuts, SOL seems to be heading to its April lows once again.

The $121.50 support is the last chance that bulls have to keep the price afloat. However, the price is not reacting to this price level as it should in the lower time frames, meaning that bulls have capitulated.