From beincrypto by Aaryamann Shrivastava

Solana has experienced a sharp drawdown, dropping below the $200 mark earlier this week. The decline comes amid broader market volatility, leaving investors uncertain about the altcoin’s next move. 

However, the recent downturn may present a bullish opportunity, provided market participants shift their stance and capitalize on the dip.  

Solana Investors Are Uncertain

The Net Unrealized Profit/Loss (NUPL) indicator has fallen into the Fear zone, retreating from the Optimism zone. This shift suggests that investor sentiment has weakened, contributing to increased selling pressure. Historically, similar dips into the Fear zone have often preceded price reversals, signaling potential recovery.  

If past trends hold, Solana could see a rebound in the coming days. Previous instances of NUPL dropping to these levels have triggered renewed buying interest, supporting price recoveries.

A shift in sentiment could provide the momentum needed for SOL to reclaim lost ground and reestablish bullish momentum.  

Solana’s Chaikin Money Flow (CMF) indicator has dropped to an 18-month low. This decline reflects a surge in outflows, marking the strongest capital flight from the asset since August 2023.

Increased selling activity suggests that investors remain skeptical, impacting SOL’s ability to sustain upward price movements.  

Sustained outflows typically signal bearish momentum as traders move capital away from the asset.

For a trend reversal to occur, Solana must attract renewed buying pressure. If investors regain confidence, the price could stabilize, paving the way for further upside potential in the near term.