Solana Price Forms Bearish Flag as Key Network Metrics Fall

Key Insights

• Solana price has formed a large bearish flag pattern on the three-day chart.
• It also formed a death cross pattern, pointing to a bearish breakdown.
• Key Solana metrics like fees and network transactions have dropped.

Solana price has moved sideways since the first week of February and formed a bearish flag pattern, pointing to a strong bearish breakdown in the coming days or weeks. The bearish SOL price forecast is also based on its weak fundamentals, including the falling network fees and ETF inflows.

Solana Price Prediction: Bearish Flag Pattern Has Formed

The three-day chart shows that Solana’s price has slumped since September last year when it jumped to the important resistance level at $253.

As the crash continued, SOL price formed a death cross pattern in January. This pattern occurred as the 50-day moving average, shown in red, moved below the 200-day moving average.

A closer look shows the coin is now forming a bearish flag, a common bearish continuation pattern. This flag began forming on January 16, when it traded at $143. The lower side of the flagpole was $67, its lowest level this year.

Solana is now in the flag section, indicating a major breakdown may occur soon. If this happens, the initial target to watch will be $50, about 35% below the current level.

The bearish SOL price forecast will become invalid if it moves above the flag’s upper boundary, which is slightly below the psychological $100 level.

Solana Network Activity Has Deteriorated

There are signs that the momentum that Solana had a few months ago has waned as the crypto winter has continued.

A good example of this is that the number of transactions Solana processed has dropped in the past few weeks. It processed 2.5 billion transactions in the last 30 days, down by 4%.

Fewer people are using Solana today, with the number of active addresses falling by 13% to below 100 million. As a result, the network is making fewer fees, with the amount falling by 25% to $18 million. Solana was making over $26 million a month a few months ago.

This retreat has coincided with the fading of on-chain activity on other major chains. For example, the BSC network handled 408 million transactions, down by 4.7%. Ethereum’s fees dropped by 10%, while Avalanche’s fell by 51%.

The same trend is happening in other areas in the crypto industry. For example, Solana network handled over $255 billion in decentralized exchange (DEX) volume in Q1, its worst performance since the second quarter of 2024.

It was much lower than the $371 billion it handled in the fourth quarter and the $542 billion in the same period last year.

Solana’s DEX volume dropped due to the broader crypto market crash and because more people are now using Hyperliquid, which handled over $200 billion in volume. Hyperliquid has become popular among traders due to its growing market share in oil trading.

Solana’s stablecoin growth has also weakened in the past few weeks. Its stablecoin supply dropped by 8% in the last 30 days to $13.9 billion, while the transfer volume plunged by 3.13% to $1.07 trillion.

Similarly, the amount of assets tokenized in the network fell by 0.78%, as the RWA transfer volume declined by 4.53% to $3.56 billion.

Spot SOL ETF demand has also continued falling and may turn negative in April. Data compiled by SoSoValue shows that these funds had over $45 million in inflows in March, its worst performance since inception. It was much lower than the previous month’s $63 million.

Solana price has plunged sharply in the past few months, and this retreat may continue in April as it has formed a bearish flag pattern and a death cross. Its fundamentals are also deteriorating, with transaction volume and fees continuing to decline. Similarly, DEX volume and stablecoin transactions have continued to fall.

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