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Solana (SOL) has rebounded more than 10% after a sharp weekend drop, but warnings are growing that the rally could be an illusion in a market where the on-chain “engine” has stalled.
According to TradingNews on March 1 (local time), SOL plunged to a lower low בעקבות a shock from Iran-related developments, then surged 10.8% on Sunday alone to reach $86.42. However, on a monthly basis it remains down 31%, including a 17% decline in February alone. Within its 52-week range of $67.48 to $253.61, the current price around $84 is still near the lower end. Technical indicators also lean bearish. The Relative Strength Index (RSI) stands at 41.10, not yet signaling oversold conditions, while the Average Directional Index (ADX) at 49.53 confirms a strong downward trend.
TradingNews noted that a head-and-shoulders pattern was confirmed on the three-day chart after the neckline near $107 broke in late January. The measured target is $59, implying roughly 30% additional downside from the $84 level. Although SOL has briefly moved above its 20-day moving average ($83.57), it remains significantly below the 50-day ($105.83) and 200-day ($157.46) moving averages.
The bigger issue is that spot trading activity supporting the rebound is cooling rapidly. Solana DEX trading volume has plunged 62% in three weeks, from $118.2 billion to $44.5 billion. Pump.fun’s volume has halved from $61.4 billion to $30.5 billion, while Meteora shrank 83% from $20.1 billion to $3.4 billion. Net buying by long-term holders dropped 92% month-over-month, from 3.47 million SOL to 266,744 SOL. Meanwhile, exchange inflows have risen to 1,561,859 SOL over the past 30 days, interpreted as a growing signal of preparation to sell.
Institutional flows, however, tell the opposite story. Weekly inflows into Solana spot ETFs tripled from $14.31 million to $43.13 million, pushing cumulative inflows past $900 million. TradingNews pointed out that the divergence—“institutions are buying while on-chain activity and retail investors are selling”—will be a key variable in March. It added that unless exchange-bound supply slows, weekly ETF demand of around $40 million may not be enough to offset selling pressure.
In conclusion, analysts suggest that defending the $67 range (the 52-week low of $67.48) has become more important than chasing the rebound. With $59 presented as the next technical target, a failure to hold support near $67 could trigger another surge in volatility. Conversely, if the $67 level holds and ETF inflows continue, it may provide a foundation for a short-term bounce. However, RSI and ADX readings still align more closely with “bear market dynamics,” making it premature to declare a trend reversal.
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