• Solana’s attempted comeback is facing headwinds, battling both significant sell pressure and a general lack of market confidence.
• Adding fuel to the fire, Solana isn’t just dealing with market trends; it’s also caught in a wave of controversy.

Solana [SOL] has taken a rough hit this month, tumbling by 36% and unfortunately earning the title of the worst performer among top cryptocurrencies. However, there’s a glimmer of hope: we’ve seen a slight 2% increase in trading volume, and technical indicators like an oversold RSI along with a bullish MACD crossover are hinting at potential dip-buying interest around the $120 mark.

The big question is, with investors still feeling risk-averse, can Solana’s bulls rely on these technical signals alone to spark a genuine recovery?

Beyond the charts: What’s really moving Solana

One major source of selling pressure continues to be Pumpfun. They recently made a significant move, transferring a substantial 196,370 SOL, worth $25.3 million, to the Kraken exchange.

Looking at the bigger picture, Pumpfun has deposited a massive total of 2,629,656 SOL, valued at $511 million when SOL was priced around $194. They’ve also sold off 264,373 SOL for $41.64 million USDC at an average price of $158, actively contributing to the current downward pressure on Solana.

With sellers dominating the market and general risk appetite still low, it’s looking tough for Solana to bounce back quickly. Adding to these concerns, Solana’s decentralized exchange (DEX) volume and Total Value Locked (TVL) have retreated to levels seen before the recent market optimism, suggesting network activity is waning.

Historically, Solana’s past recoveries have typically been supported by strong surges in both TVL and DEX volume, often acting as reliable indicators that the market has bottomed out.

However, a worrying sign emerged on March 15th when Solana’s DEX volume dipped below the $1 billion mark, raising red flags about a possible shift in trend.

Source: DefiLlama

Unless buyers step up significantly and inject strong momentum, the path of least resistance for Solana seems to be downward. Further complicating matters, Solana is now facing criticism and negativity due to a controversial advertisement that appeared on X (formerly Twitter).

This ad, which quickly racked up 1.2 million views, was overwhelmingly received poorly, prompting Solana to take it down. However, the negative impression lingered, impacting overall market sentiment around SOL.

Adding to the bearish picture, the overall Weighted Sentiment towards Solana has turned negative. This reinforces the lack of any clear bullish signals and suggests that investors are remaining cautious and doubtful about a potential Solana rebound.

What’s next for Solana? Assessing its potential moves

Solana’s recent price action really throws a spotlight on the ongoing imbalance between supply and demand. Even as Bitcoin manages to stabilize, Solana hasn’t yet attracted substantial fresh capital from larger, strategic investors.

Despite the significant 30% price drop this month, these lower prices haven’t been enough to trigger strong buying activity or accumulation. Looking at the SOL/BTC trading pair, it’s continuing its decline, recently hitting a two-year low and signaling that Solana’s strength relative to Bitcoin is weakening.

Source: TradingView (SOL/BTC)

Given the overwhelming sell-offs and the prevailing negative sentiment, the lack of strong conviction from risk-conscious traders significantly reduces Solana’s chances of breaking through key resistance levels anytime soon.

Considering the current market climate and all these factors, another dip downwards towards $120 or even lower is looking increasingly likely for Solana.