Solana Drops to 2-Year Lows — History Suggests a Bounce Toward $100 is Incoming

Core Insights - Solana has experienced significant price pressure, reaching levels not seen in nearly two years, primarily due to broader market weakness [1] - Early signs of stabilization are emerging, suggesting a potential recovery that could push the price back toward or beyond the $100 mark [1] Valuation Metrics - On-chain valuation metrics indicate that Solana is deeply undervalued, with the Market Value to Realized Value (MVRV) ratio at a near two-and-a-half-year low, reflecting unrealized losses among holders [2][3] - Currently, only 21.9% of Solana addresses are in profit, indicating that approximately 78.1% of holders are underwater, a condition historically associated with market bottoms [8] Historical Context - Historical patterns suggest that conditions where realized value exceeds market value often lead to diminished selling pressure, as investors are less inclined to exit at a loss [3] - Previous cycles show that profitability dropping near or below 20% has preceded notable recoveries, as reduced profit-taking limits supply and lower prices attract value-oriented participants [9] Price Analysis - Solana is currently trading near $86, above the 23.6% Fibonacci retracement level, which is considered bear market support [10] - A decisive move above $90 could set Solana on a recovery path toward $100, with confirmation expected if the price flips the 61.8% Fibonacci level near $105 into support [12] - Current stabilization suggests that SOL may be forming a bottom, with the Chaikin Money Flow indicator showing an uptick, indicating that selling pressure is easing [11]