Solana (SOL) has faced a significant downturn in recent weeks, with the price dropping below $160 for the first time since November 2024. The cryptocurrency is now stuck within a steep bearish channel, struggling to gain any upward momentum. As the market sentiment turns increasingly negative, Solana faces numerous challenges, including decreasing network activity and growing selling pressure.

Bearish Sentiment Drives Solana Price Down

Several factors have contributed to the negative price action for Solana. Most notably, there has been a marked decline in on-chain metrics, with decentralized exchange (DEX) activity dropping for the fifth consecutive week. This suggests that investor confidence is weakening, and Solana is facing mounting competition from other tokens, especially Ethereum, which has been drawing increased attention from the market.

The primary reason for the current decline in SOL’s price is believed to be the significant selling activity from Binance. In recent weeks, Binance has reportedly offloaded a large amount of SOL, putting added downward pressure on the token. This selling spree coincides with the imminent unlocking of $2 billion worth of SOL, which is expected to further contribute to the bearish outlook.

Wintermute’s Withdrawal Raises Concerns

To make matters worse, Wintermute, a leading liquidity provider, recently withdrew a large amount of Solana from Binance, further fueling the bearish sentiment. According to reports, Wintermute withdrew $38 million worth of SOL, suggesting that the firm might be preparing to sell at current highs. This move has created the potential for panic selling, which could drive the price even lower as market participants rush to exit their positions.

With these factors in play, the SOL price has now broken below its crucial support level of $158. This failure to hold the support after a period of brief consolidation suggests that a larger correction may be on the horizon. The current breakdown has exposed the price to further downside risks, potentially pushing it below the critical $150 mark.

Technical Indicators Point to Further Decline

On the daily chart, Solana’s technical indicators confirm the worsening bearish trend. The Gaussian channel, which had previously indicated a neutral to bullish outlook, has now turned bearish as the price has dropped well below it. This suggests that Solana will need a significant recovery phase to shift the trend back in a positive direction.

Additionally, the Chaikin Money Flow (CMF) indicator has fallen below zero for the first time since December, indicating that selling pressure is outweighing buying activity. This shift in the CMF highlights the increasing dominance of bears in the market, which is expected to push Solana’s price lower.

What’s Next for Solana?

As the bearish momentum strengthens, Solana faces a crucial test at its local support zone, which is positioned between $138 and $139. If the SOL price fails to hold above the $150 level, it could quickly drop to this lower support range, with $140 acting as a psychological level to watch.

For Solana to recover, it will need to overcome the strong bearish pressure and regain the crucial $158 support level. However, with the current market dynamics and increasing selling pressure, a drop below $150 seems imminent, and the price may even retest the $140 to $139 support zone in the near term.

Conclusion: Is a SOL Price Recovery Possible?

The future of Solana’s price remains uncertain as it faces multiple challenges from both a technical and fundamental perspective. With selling pressure increasing and on-chain metrics showing signs of weakening, Solana’s price could continue its bearish path. Traders should remain cautious and watch for signs of stabilization or a potential rebound. If the price fails to hold the critical support levels, a further drop below $150 may become increasingly likely.