- Solana recent 10% price rally faces risk as declining liquidity and falling network activity signal weakening demand.
- Without stronger support, the token could reverse toward $205, despite its bullish channel.
Solana has rallied nearly 10% over the past week, lifted by renewed optimism in the broader crypto market. Bitcoin’s recent surge has helped fuel altcoins, and Solana (SOL) has been among the top gainers. However, beneath the surface, troubling signs suggest the rally may not last.
Bearish Divergence Signals Risk
One of the key indicators raising concern is the Chaikin Money Flow (CMF). Currently trending at -0.06, the CMF is showing a bearish divergence even as Solana’s price climbs. This negative reading signals that while buyers are still active, liquidity inflows into the token are weakening.
In technical analysis, such divergences often hint at a potential reversal. With reduced capital support, Solana’s rally could run out of steam, leaving it vulnerable to a near-term pullback.
Declining Network Activity
Beyond technical indicators, on-chain data adds further weight to the bearish case. The number of new addresses on the Solana network has dropped 15% since September 18, according to Glassnode. A slowdown in wallet creation signals weaker demand and participation, both critical drivers of long-term growth for any blockchain ecosystem.
Lower daily activity often translates into reduced buying pressure, making it harder for rallies to sustain momentum. Without consistent network engagement, price gains can quickly fade.
Solana Price Outlook: Bullish Channel Under Threat
Currently, SOL trades within an ascending parallel channel, a structure often viewed as bullish. If the token manages to hold this formation, its price could extend upward toward $253.66.
However, weakening demand and liquidity suggest the opposite outcome is more likely. A break below the channel could push Solana down toward $205.02, erasing much of its recent progress.
While Solana’s recent rally has excited traders, underlying data paints a cautious picture. Bearish divergence in liquidity flows and declining network activity raise doubts about the sustainability of the uptrend. Unless demand strengthens, Solana may soon face a sharp correction.
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