Solana Price Falls Behind Bitcoin Rally: Here’s the $1.26 Billion Signal Keeping SOL Below $160

Solana Price Analysis: 

Solana price opened trading at $152 on Saturday, Oct 19, down 3% from its weekly timeframe peak of $159 recorded on Monday. On-chain data trends shows a steady decline in SOL trading volumes may have played a critical role in repelling multiple $160 breakout attempts.

What next for Solana price after a week-long consolidation phase, lagging behind the broader crypto market rally.

Solana Price Fails $160 Test Despite Bitcoin 10% Rally

Along with the rest of the crypto sector, Solana made a strong start to the week, as dovish inflation report from China sparked on Oct 14 demand from alternative assets. By the close of Monday October 15, Solana price has surged to a new monthly time frame peak of $159.

As the week progressed, bullish comments from Blackrock CEO, Larry Fink, combined with strong institutional demand, drove the crypto market rally into second gear.

But while prominent top 10 ranked crypto assets including Bitcoin (BTC), Ethereum (ETH) and Dogecoin (DOGE) all hit new peaks during the week, Solana price failed to advance further.

Emphasizing the bearish concerns, the SOLUSD daily price chart above shows how Solana price stagnated below $160 despite multiple breakout attempts. At the time of writing on October 19, SOL has retraced towards the $155 level, reflecting a 3.12% correction from the weekly timeframe peak recorded on Monday.

Meanwhile, in comparison, Bitcoin rose 10% from an opening price of $62,850 on Monday Oct 15, to reach a new weekly peaks $68,600 on Oct 18, and now on course for it highest weekly close in over 80-days dating back to June 2024.

When a top ranked asset like Solana falls this far behind, during a sector-wide rally, its raises concerns that internal bearish factors are at play.

Solana Trading Volume in Decline as Traders Focus on Memecoins

Notably, the Solana memecoin sector has been on a tear this week as positive macroeconomic indicator spurred demand for high-risk, low-liquidity assets. Amid the crypto market rally, likes of Dogwifhat (WIF), BONK and POPCAT all delivered weekly gains in excess of 20%.

However, a closer look at other vital market trends suggest the rising demand for Solana meme coins appears to have skewed investors’ attention away from SOL, the ecosystem main native coin.

Corroborating this narrative, the Coinglass charts below, depicts daily changes in Solana’s trading volume and open interest trends.

While trading volume shows the aggregate value of spot transactions involving SOL, Open Interest (OI) tracks changes in total capital invested within Solana secondary derivatives markets, both combining.

Since Solana hit $159 level on Monday, demand the SOL has nosedived both in the spot markets and derivative futures contracts.

The chart above shows that Solana trading volume had reached $6.02 billion on Monday Oct 15. But since the $160 rejection, that figure has entered a steep decline, falling as low $4.7 billion at close of Oct 18, reflecting $1.26 billion dip.

In the same vein, Solana’s Open Interest also posted a significant $140 million decline from $2.51 billion on Oct 15, to hit $2.37 on Oct 18.

Hence, a $1.26 billion trading volume dip, and $140 million decline in Open Interest, show that demand for the native SOL coin took a major dip in both the spot and derivatives markets, despite Solana memes racing up the top gainers charts.

This explains why Solana’s bullish momentum weakened and stagnated below the $160 level despite Bitcoin and other top ranked Layer-1 coins advanced to new peaks.

Without an uptick in demand, Solana’s price consolidation phase could persist over the weekend, and bulls sit-and-wait for the next major positive catalyst.

Solana Price Forecast: Current Demand too Weak to Flip $160 Resistance

Solana price has been range-bound between $150 and $160, facing strong resistance near the $160 mark, which has acted as a ceiling for three consecutive weeks.

In terms of short-term price action, the Solana’s main resistance level is marked by the R1 pivot point at $159.39. Until SOL price breaks through that key psychological $160 resistance, reversal risks remain active.

The Bull-Bear Power (BBP) indicator currently reads 9.92, indicating that Solana is still trading within overbought territory. However, without substantial volume support, this could signal a potential reversal back to support levels if buyers fail to take advantage of market sentiment.

Meanwhile on the downside, Solana’s short-term price support has been established around the $150 to $152 range, creating a narrow consolidation channel.

Given Bitcoin’s continuing rally and its positive influence on the broader crypto markets, Solana bulls may attempt another breakout above $160. However, unless there’s a corresponding increase in trading volume and open interest, it’s more likely Solana will remain range-bound below $160.

Strategic traders will likely wait for a confirmed breakout above $160 or a breakdown below $150 before entering larger positions, as the current price action suggests indecision. Should Solana breach the $160 resistance, the next target could be $173.90, while a drop below $150 could open the door to a retest of the $130 support.

In summary, the technical outlook leans toward a prolonged consolidation phase until a major bullish catalyst emerges.