Solana Price Prediction: Buyers Show Up to Contain SOL’s Decline at $180

 

Crypto traders went through their worst day in history this last Friday as President Donald Trump’s threat to impose a 100% tariff on Chinese imported goods resulted in a catastrophic drop in the price of all cryptocurrencies – including Solana (SOL).

Data from CoinGlass shows that long liquidations spiked to $16.7 billion during what will surely go down in history as crypto’s “Black Friday.” In the case of Solana, this resulted in a flash crash from $224.5 to $188, followed by a sharper decline to $173 on Saturday.

Total Crypto Liquidations (6 Months) – Source: CoinGlass

Cascade liquidations are not uncommon in the crypto market, especially in the current conditions, as traders were already too “one-sided” and everyone expected an unstoppable move upwards to new heights for SOL.

Nonetheless, the magnitude of last Friday’s drop and its impact on market sentiment should not be underestimated.

It was the market’s expectation that Trump’s negotiations with China were advancing favorably. However, his Truth Social post indicated that the Asian country’s decision to impose strict export controls on rare earth minerals and other products enraged the President.

Technical Indicators Favor a Full-Blown Recovery, For Now

A total of $1.7 billion worth of SOL long positions were flushed out of the market as a result of the turmoil.

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

However, the price recovered just a day after and has managed to climb back above $190, possibly as the overall narrative that fueled SOL’s rally above $200 continues to be quite strong.

Looking at the daily chart, SOL found strong support at $180 and has bounced off that level decisively, as reflected by the token’s above-average trading volumes.

The price has once again moved above the 200-day exponential moving average (EMA), which favors a bullish outlook.

A move above $210 could confirm that a full-blown recovery is possible. However, the Relative Strength Index (RSI) has plummeted below the 14-day moving average as bearish momentum accelerated as a result of Friday’s drop.

As long as SOL stays above $180, the token’s outlook will continue to be positive. Nonetheless, a move below this mark could result in a much deeper correction to $157 or worse.

Sentiment Suffers as The Market Waits for the Fed’s Reaction

Even though top cryptos like Bitcoin (BTC) and Ethereum (ETH) have recovered as well, while BNB Coin (BNB) surprisingly just made a new all-time high, market sentiment has soured.

Fear and Greed Index – Source: CoinMarketCap

The Fear and Greed Index plummeted from 58 on Wednesday to 31 during the weekend, indicating investors’ cautiousness as the week starts.

The American session will likely determine if this recovery is sustainable or if institutional investors will resume the selling spree. It is worth noting that Trump’s remarks came out after the market closed.

Traders and investors had the entire weekend to digest the implications of the President’s move, and they should be ready to make their move.

The most catastrophic impact that this decision could have on macroeconomic conditions, and the one that could result in an even more dramatic drop, would be a change of heart by the Federal Reserve.

If the U.S. central bank opts to postpone its planned, and widely expected, 25bps interest rate cut this month, that could entirely derail the market’s recovery and push SOL to the low levels we saw last week.

Uncertainty reigns, and market participants do not like that. Hence, volatility could spike at any given point depending on how this narrative unfolds throughout the week.