Solana’s price has been on a downward trend since the middle of September, reflecting a slowdown in network activity and broader market pressures. The cryptocurrency has fallen over 50% from its all-time high and was trading at approximately $139.75, with its daily trading volume showing a 20% decline to $6.85 billion.

The downturn began during a wider market sell-off in September, which impacted many altcoins. Investor appetite for riskier assets like cryptocurrencies has also been dampened by concerns over inflation, shifting interest rate policies, and global economic uncertainty.

On-Chain Metrics Signal Capital Outflow

A closer look at Solana’s on-chain data reveals weakening fundamentals. The Total Value Locked (TVL) across decentralized finance protocols on the blockchain has decreased from $35.4 billion in mid-September to $25.8 billion. Similarly, the supply of stablecoins on the network has shrunk by nearly 20% from its peak in October, now standing around $13 billion.

These declining metrics suggest that capital is steadily moving out of the Solana ecosystem. If negative risk sentiment continues, investors may further withdraw liquidity and reduce their exposure to the asset.

Technical Indicators Point to Further Downside

From a technical standpoint, the outlook appears bearish. A large-scale rounded top pattern has formed on Solana’s daily chart. This formation, which resembles a dome, typically emerges as upward momentum fades and often signals a precursor to significant price declines.

Adding to the concern is a potential “death cross,” a bearish indicator that occurs when the 50-day Simple Moving Average crosses below the 200-day Simple Moving Average. While it’s a lagging indicator, its appearance alongside the rounded top pattern strengthens the case for a continued downtrend.

Based on these factors, Solana’s price could be at risk of dropping to the key support level of $120, a point where buyers have historically intervened. If this support fails to hold, a further slide toward $95—a level last seen in April—becomes increasingly likely.

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