Solana (SOL) Tests Critical Support at $167 Amid 25% Correction from July Highs
Joerg Hiller Aug 07, 2025 02:40
SOL trades at $167.36 (+2.83% today) after dropping 25% from July peak, with RSI neutral at 47 but bearish MACD signaling potential further downside ahead.
Quick Take
• SOL currently trading at $167.36 (+2.83% in 24h) • Solana's RSI at neutral 47.39 but bearish MACD momentum persists • Network activity declining with 16% drop in daily active addresses
What's Driving Solana Price Today?
The SOL price has shown modest recovery today, gaining 2.83% to reach $167.36, but this bounce comes against a backdrop of significant bearish pressure. Just two days ago on August 5th, Solana experienced a sharp 25% decline from its July 2025 peak of $206, bringing the token down to $162 and reducing its market capitalization to $90 billion.
This dramatic pullback appears driven by widespread profit-taking and mounting market uncertainty. The decline has been accompanied by concerning network metrics, with Solana's daily active addresses dropping 16% in early August according to recent data. Additionally, the network's non-vote transactions retreated from 1.3 billion in July to 1.1 billion in August, signaling reduced user engagement across Solana's ecosystem.
The bearish sentiment has also impacted Solana's DeFi sector, where Total Value Locked (TVL) declined 8% in early August after reaching mid-July peaks. Despite these headwinds, Solana's decentralized exchange volumes surged 30% in July, hitting over $82 billion in trading activity, though this positive momentum appears to have stalled in recent days.
SOL Technical Analysis: Mixed Signals with Bearish Undertones
The current Solana technical analysis reveals a complex picture with conflicting signals across different timeframes. Solana's RSI sits at 47.39, placing it firmly in neutral territory and suggesting neither overbought nor oversold conditions. However, the SOL RSI position indicates potential for movement in either direction.
The MACD indicator presents a more concerning picture for SOL bulls, with the main line at -0.6329 below the signal line at 1.8634, creating a bearish histogram of -2.4964. This configuration typically indicates weakening upward momentum and potential continuation of the downtrend.
Solana's moving averages paint a mixed picture. The current SOL price of $167.36 sits above the 50-day SMA at $162.92 and the 200-day SMA at $160.80, maintaining some long-term bullish structure. However, it remains significantly below the 20-day SMA at $177.96, highlighting the recent bearish pressure.
The Stochastic oscillator shows SOL in oversold territory with %K at 29.24 and %D at 25.63, which could signal a potential bounce if buying interest emerges. Based on Binance spot market data, Solana's Average True Range of $9.33 indicates elevated volatility, creating both risk and opportunity for active traders.
Solana Price Levels: Key Support and Resistance
Critical Solana support levels are coming into focus as the SOL price tests lower ranges. The immediate support zone lies at $155.83, which aligns closely with the Bollinger Bands lower band at $153.86. A break below this level could trigger further selling pressure toward the strong support at $126.00.
On the upside, SOL resistance remains formidable at the $206.30 level, representing both the immediate and strong resistance zones. This level coincides with Solana's recent July peak and would need to be reclaimed convincingly to restore bullish momentum.
The current position within the Bollinger Bands shows SOL at 0.2801, indicating the price is trading in the lower portion of the bands but hasn't reached extreme oversold conditions. The SOL/USDT pair would need to break above the middle band at $177.96 to signal a potential trend reversal.
Should You Buy SOL Now? Risk-Reward Analysis
For aggressive traders, the current SOL price level presents a potential contrarian opportunity, particularly given the oversold Stochastic readings and proximity to key support levels. However, the bearish MACD momentum suggests waiting for clearer reversal signals before establishing long positions.
Conservative investors should exercise caution given the declining network metrics and recent price volatility. The 16% drop in daily active addresses and 8% decline in DeFi TVL indicate fundamental headwinds that may persist in the near term.
Risk management becomes crucial at current levels. Stop-loss orders below $155 would limit downside exposure, while profit targets could be set at the 20-day SMA around $178 for short-term trades. The daily ATR of $9.33 suggests position sizing should account for potential $18-20 daily moves in either direction.
Traders should monitor the SOL/USDT pair closely for volume confirmation on any breakout attempts. Without significant buying volume, any bounce may prove temporary given the current bearish momentum structure.
Conclusion
The SOL price sits at a critical juncture, having recovered modestly to $167.36 but facing significant technical and fundamental headwinds. While the neutral SOL RSI provides some hope for bulls, the bearish MACD and declining network activity suggest caution is warranted. Traders should watch for a decisive break above $178 to confirm trend reversal or a breakdown below $155 for continued bearish momentum over the next 24-48 hours.
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