Key takeaways
- Solana (SOL) price is down nearly 2% in the past 24 hours after failing to break the crucial $78 resistance level.
- Solana Marketplace ETFs recorded net outflows, indicating weak institutional demand.
- A break below $74 could send SOL towards $64, while a break above $78 could send it rising to $90.
Solana (SOL) extended its recent decline on Friday, falling nearly 2% over the past 24 hours as buyers once again failed to overcome the key resistance level at $78.
Although slowing US inflation briefly boosted risk appetite earlier this week, the rally lacked enough momentum to sustain the breakout. At the same time, lower trading volumes and renewed ETF outflows have added to the dovish outlook.
Trading activity declined after the recent rise
Market participation has slowed significantly in recent sessions. Daily trading volume has fallen from a short-term peak of about $4 billion on July 2 to about $2 billion, indicating a decline in buying interest after the recent rebound.
The inability to break the $78 resistance level despite improving macroeconomic sentiment suggests that bullish momentum may be weakening.
Corporate morale has also declined. According to CoinGlass, Solana-focused exchange-traded funds (ETFs) It recorded nearly $700,000 in net outflows this week.
This reversal contrasts with recent weeks, when Solana ETFs attracted more than $1.1 million in inflows and have accumulated nearly $3 million since the beginning of the month.
This shift suggests that institutional investors remain cautious as uncertainty surrounding interest rates and broader market conditions continue to weigh on risk assets.
Despite the weak price action, Solana network fundamentals continue to improve.
Data from Santiment shows that daily active addresses (DAAs) have continued to rise, indicating increased user activity across the network.
It is worth noting that the 30-day moving average of daily active addresses has crossed the 50-day moving average, with the gap widening in recent days.
Historically, similar crossovers have been preceded by significant moves in Solana prices, although they do not indicate whether the move will ultimately be bullish or bearish.
An increase in active portfolios indicates that investors are taking positions ahead of the next major directional move for the token.
SOL faces a critical technical crossroads
Technically, Solana remains trapped below the important $78 resistance level. Repeated rejection of this price has reinforced it as a major barrier that the bulls must overcome before a sustainable recovery develops.
On the downside, immediate focus turns to uptrend line support near $74. This level represents a crucial defense for buyers.
If $74 fails to hold, Solana’s decline could accelerate towards the next major support level around $64.
Momentum indicators are starting to favor the bears. The Relative Strength Index (RSI) fell to around 49, falling below the signal line and indicating weak upward momentum.
A move towards the 40 level would reinforce the bearish outlook and indicate that sellers have gained greater control.
Conversely, a decisive break above $78 could trigger a wave of short covering, as a large number of stop-loss orders are believed to be placed above this level.
Such a move could accelerate buying momentum and open the door to a rally towards $90.
For now, Solana remains at a pivotal technical level, with declining institutional flows belied by strengthening on-chain activity. The next breakout or breakdown will likely determine the token’s short-term trend.
