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Solana's logo.

The cryptocurrency Solana (SOL) has dropped more than 10% over the past week, leading to a growing wait-and-see attitude in the market. Until recently, expectations for a rebound had been building alongside a surge in trading volume. However, a combination of Bitcoin corrections and dampening investor sentiment for altcoins has once again put downward pressure on the token. Market views are now split between those seeing it as a short-term correction and others warning of potential further declines. 

According to global cryptocurrency market tracking platform CoinMarketCap on May 18, Solana was trading at $84.72 as of 1:30 p.m., down 2.68% from the previous day. This marks a roughly 10.57% drop compared to a week ago.

Until recently, Solana had been underperforming compared to Ethereum. However, an influx of users centered around DeFi and meme coin ecosystems drove up trading volume, sparking a price rebound. Notably, it was ranked as one of the most heavily traded cryptocurrencies last week according to Korbit Research, drawing significant market attention. During this rally, Solana even broke above its 100-day moving average, a level regarded as a key technical resistance line.

But the mood has shifted once again in recent days. As major cryptocurrencies including Bitcoin entered a correction phase, investor sentiment for altcoins has also cooled rapidly. Indeed, top coins like Bitcoin and Ethereum saw declines of around 5% to 9% over the week on CoinMarketCap.

Some market analysts note that capital flows have been shifting back toward Bitcoin rather than altcoins. The CoinMarketCap Altcoin Season Index has slid to around 30. Generally, a lower reading on this index indicates that market liquidity is concentrating heavily in Bitcoin rather than altcoins.

Industry observers attribute Solana's recent decline largely to profit-taking following a short-term rally. In fact, Solana had posted relatively high gains among major altcoins over the past month, sparking some concerns over near-term overheating.

Nevertheless, positive long-term outlooks remain. Proponents point out that the Solana Foundation continues to stabilize the network and expand its developer ecosystem, while maintaining a competitive edge in DeFi, gaming, and NFTs thanks to its fast processing speeds and low transaction fees.

According to cryptocurrency data platform The Block, trading volume on Solana-based decentralized exchanges (DEXs) has shown a steady upward trend recently. This is interpreted as a sign that the actual user base and ecosystem activity remain intact.

On the other hand, some technical analysts warn that downward pressure is mounting. If key support levels give way, investor sentiment could deteriorate sharply, triggering further drops. Currently, the $80 mark is being watched as the critical line of defense. Some even predict a plunge of up to 50% if the downward trend persists. Veteran trader Peter Brandt warned, "If the support level breaks, the chart suggests it could drop into the $40 range."

Meanwhile, the Crypto Fear & Greed Index compiled by CoinMarketCap stood at 39, entering "Fear" territory. The index indicates extreme investor caution as it nears 0, and potential market overheating as it approaches 100.