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Solana [SOL] hit a new all-time high in December, but has since seen a pullback, declining 18.18% over the past month.
However, as the asset has risen 7.09% over the past week and 5.42% in the past 24 hours, the situation appears to be changing.
While the bullish momentum is evident, uncertainty still exists. The overall structure leans bullish, but the recent selling pressure has raised questions about the sustainability of this trend.
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Trading volume surges, but sellers dominate
The trading activity on the Solana network has surged, with 66.9 million transactions executed in the past 24 hours. This trend is occurring as the asset gradually recovers from its recent slump.
The surge in trading volume may signal either bullish or bearish sentiment, depending on whether market participants are buying or selling. To discern the trend, AMBCrypto analyzed Solana's exchange net flow.
Exchange net flow measures the difference between asset inflows and outflows on exchanges. Positive net flow indicates more selling activity, while negative net flow suggests buying pressure dominates.
So far, Solana's exchange net flow has been negative on both a daily and weekly timeframe, indicating that buying activity has exceeded selling activity.
In the past 24 hours, $6.15 million worth of SOL has been sold, and in the past 7 days, $75.18 million worth of SOL has been sold.
Despite the buying pressure, the 5.42% increase in the SOL price over the past 24 hours seems fragile.
A closer analysis of the trading volume reveals that the price has declined by 25%, suggesting that the recent upswing may lack sufficient market momentum to sustain it.
Typically, when prices surge accompanied by a decline in trading volume, it indicates a temporary price increase without substantial market support.
Unless Solana's trading volume increases correspondingly to support its price movement, the asset remains at risk of further pullback.
Despite the pressure, SOL maintains bullish potential
SOL has entered a critical support area on the chart, trading within a bullish triangle structure.
This support zone lies between $188.89 and $173.24, an area historically associated with significant buying pressure, although this activity has not yet materialized.
If SOL breaks above this support area, it is likely to re-enter the consolidation phase it recently exited.
Conversely, if the support level becomes a catalyst for a rebound, the asset could see a significant upswing. This could propel SOL to reach its previous all-time high or even surpass it.
