Solana (SOL) experienced a notable % price drop of 4% over the past 48 hours, settling at $225. This decline comes as other altcoins like Ethereum (ETH), Chainlink (LINK), and AAVE rallied on the back of purchases by World Liberty Financial (WLFI), a cryptocurrency firm backed by U.S. President-elect Donald Trump.
Despite broader altcoin market growth, Solana saw a detachment from the trend as retail investors appeared to redirect capital toward Ethereum-based assets. However, on-chain metrics reveal that Solana whales are capitalizing on the dip, indicating potential for a rebound.
Solana Price Drops Amid Shifting Market Focus
On December 11, WLFI purchased significant amounts of Ethereum, Chainlink, and AAVE, causing these Ethereum-based tokens to experience double-digit gains. The market’s reaction to this acquisition redirected investor attention, contributing to Solana’s struggle to maintain upward momentum.
Solana Price Action:
While the overall altcoin market rose by 10%, Solana’s price fell by 4.6%, losing nearly $3 billion in market capitalization. Currently, SOL is trading at $224 at press time, detached from the broader market’s recovery.
This underperformance validates speculation that Trump’s indirect endorsement of Ethereum-based assets may have momentarily influenced capital flows away from Solana, Ethereum’s major Layer-1 rival.
Whale Activity Points to Potential Rebound
Despite the decline in price, Solana’s on-chain data shows strong whale accumulation during the dip, which could support a bullish reversal.
The chart below, sourced from Hellomoon, highlights an increase in average balances held by addresses acquiring SOL over the past week. The average balance on buying addresses surged from 383 SOL on Tuesday to 1,096 SOL on Thursday, representing a 186% increase.
Average balance in Solana (SOL) purchase addresses | Source: Hellomoon
Whale Buying Activity:
This significant uptick in whale demand indicates growing confidence among large investors, who anticipate a recovery. The increase in market liquidity from whale buying helps stabilize prices by easing selling pressure.
Solana Price Prediction: Critical Levels to Watch
Resistance Levels:
- $231 (Donchian Channel Midline): A close above this level could signal the beginning of a recovery phase, inviting strategic traders to reenter the market.
- $259 (Upper Donchian Band): Breaching this level would mark the next resistance target, potentially attracting further bullish momentum.
Solana 1-Month Price Chart| Source: CoinMarketCap
Support Levels:
- $203: Strong support exists here, and a drop below this level could lead to further corrections.
Technical Indicators:
- The Relative Strength Index (RSI) is neutral at 48.36, suggesting neither bulls nor bears are in full control.
- Volume trends remain cautious, with significant buying pressure yet to emerge, signalling traders should monitor these levels closely before confirming a trend reversal.
Outlook
While Solana’s price decline reflects a shifting market focus toward Ethereum-backed assets, the surge in whale activity during the dip signals potential for a bullish rebound.
Bullish Scenario:
A decisive close above $231 could set the stage for a rally toward $259 and potentially higher levels.
Bearish Scenario:
Failure to maintain support at $203 could trigger a deeper correction.
For traders and investors, closely monitoring these key levels and market indicators will be essential in navigating Solana’s price trajectory in the coming days.
