Solana (SOL) Price May Drop 30% in Q3 as Rally Loses Steam

If technical setups prove correct, the price of Solana (SOL) might drop in the upcoming quarter. SOL's recent rally has lost steam

Technical setups indicate a possible decline in Solana (SOL) price in the upcoming quarter. After a recent rally, SOL’s momentum seems to be waning, and several indicators suggest further downside risks.

Chart: TradingView. Analysis by CoinChapter

Solana (SOL) Price Analysis: Key Technical Indicators Suggest Bearish Signal

The SOL/ETH pair is currently trading within an ascending parallel channel construction, approaching the pattern’s upper trendline resistance. If the token bounces off this resistance trendline, or if the pair loses momentum, it could lead to a drop to the channel’s support.

Hitting the support line would entail a nearly 33% decrease in SOL exchange rate against ETH, bringing the pair to a projected price target around 0.04 ETH, or $107.5. For reference, SOL price was trading at $159 at the time of writing.

Moreover, on the daily chart, the SOL/ETH pair is displaying a classic bearish divergence. As the price continues to reach higher highs, the RSI fails to follow, instead creating lower highs. This divergence signals a weakening in bullish momentum, indicating potential upcoming downward pressure.

Traders often use this as an early warning of a possible trend reversal. The current uptrend may falter, leading to a price correction or a shift toward a bearish trend.

Solana Network Activity and Its Impact on SOL’s Bearish Outlook

The Solana network has recently seen a significant drop in transaction fees, largely driven by a decline in memecoin trading. This downturn reflects reduced speculative interest and could also be a harbinger of broader challenges for SOL’s price trajectory.

As memecoins like Dogwifhat, Bonk, and others lose momentum, the network transaction volume—once a key aspect of Solana’s vibrant activity—has been severely impacted.

Furthermore, the reduction in network usage is likely to diminish SOL’s appeal, particularly for investors who rely on staking rewards and other on-chain activities that thrive on high transaction volumes.

From a technical perspective, the declining activity adds to the bearish divergence already observed in the SOL/ETH pair charts. As the price struggles to maintain its upward momentum, with RSI weakening, the diminishing memecoin activity serves as an additional layer of bearish confirmation.

This trend suggests that the demand for SOL could further wane, leading to sustained downward pressure on the token’s price. If the network fails to find new catalysts to drive activity and engagement, SOL could be vulnerable to a significant correction, potentially validating the anticipated 30% drop in Q3.

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