The price of Solana (SOL) formed a “death cross” on the daily chart on March 12, as the altcoin stabilized near its long-term support level around $125.
This development could hasten a sell-off for SOL, pushing the price below $100 for the first time since February 2024.
Solana’s daily chart. Image source: TradingView
A death cross is identified when a bearish crossover occurs between the 50-day and 200-day simple moving averages (SMAs), with the longer-term indicator placed above the shorter-term indicator.
Last month, a death cross was seen on Solana’s daily chart when the 50-day and 200-day exponential moving averages (EMAs) crossed, leading to a 17% decline from $137 to $122.
While the implications of SMA and EMA death crosses are similar, the EMA tends to trigger the death cross sooner due to its quicker response to price fluctuations. The occurrence of a double death cross from both SMA and EMA may heighten the chances of a market correction.
Historically, the outlook for Solana has been mixed. Since its launch, SOL’s price has experienced a death cross three times (including in 2025) during periods of a downtrend lasting 90 days or more.
The initial death cross in 2022 resulted in a dramatic 90% drop, exacerbated by the fallout from the FTX incident. The second death cross happened in September 2024 but saw a reversal within a month, giving rise to what is known as the Trump rally.
Related: 3 reasons why Ethereum can outperform its competitors after dropping to 17-month lows
However, the current conditions and sentiment closely resemble those during the 2022 death cross. In both instances, a new all-time high preceded the downward trend that led to the formation of the death cross.
Reports indicate that Solana’s revenue has plummeted by 93% since January, falling from $238 million to $32 million. This reflects a current decline in activity on Solana’s network, especially following the end of the memecoin excitement.
Can traders maintain support at $125?
From a technical standpoint, Solana finds itself in a precarious position compared to the outcomes of previous death crosses and the overall market sentiment.
For a bullish reversal to occur, SOL needs to sustain support within the $125 to $110 range. Since March 2024, SOL has rebounded six times after approaching this support band, consistently closing above $125 after each weekly retest.
Solana weekly chart. Image source: TradingView
A weekly close beneath $125 could signal weakness in the market, potentially raising the risk of a drop below $100. The immediate target after $110 would be around $80 for Solana, representing a significant 30% correction and coinciding with the weekly 0.5 Fibonacci retracement line.
Solana bullish divergences observed on the daily and 4-hour charts. Image source: TradingView
Nevertheless, bulls are banking on a bullish divergence between the price and the relative strength index (RSI) found on the daily and 4-hour charts.
If Solana can avoid establishing another lower low, these divergences may remain valid, potentially allowing prices to climb back above $125, thus preventing a dip below $100, and perhaps establishing a bottom at $112.
Related: Will Bitcoin price reclaim $95K before March ends?
This article does not constitute investment advice or recommendations. Every investment and trading move involves risks, and readers should perform their own research before making decisions.