Solana maintains above $120, fueling expectations of a bull market resurgence. However, declining revenues suggest a potential crash in the future.

With the cryptocurrency market at a potential crossroads of a bull market recovery, Solana is experiencing a slight rebound above $120. Notably, SOL has dropped 14% over the past seven days.

Amid a slight recovery, there are increasing expectations of a potential bull market resurgence. However, analysts caution that Solana may decline.

Solana sell signal

On the daily chart, Solana's price trend shows a rapid bullish recovery, soaring 5.98% on March 11. This ended a series of five bearish candles but failed to establish a new bullish trend.

Solana retraced 1.14% intraday, with the current trading price at $123.94. This short-term reversal may be a retest of the demand turning into supply zone at $130.

Solana has fallen nearly 60% from its historical high of $295. This has led to a 'death cross' event between the 50 and 200 EMA lines.

Additionally, the 100 and 200 EMA lines are about to cross, which will trigger the EMA lines to issue a strong sell signal.

-The surge in meme coin trading volume has led to a significant increase in demand for block space, with speculators executing large volumes of trades, increasing trades per second. This has created a 'SOL wealth effect', pushing up the SOL price, generating more liquidity, and increasing risk appetite.

However, with Solana's recent price decline, traders have become more risk-averse. Additionally, the decrease in meme coin activity on the Solana network has also led to a sharp decline in its REV.

Solana's weekly REV has decreased by 90% from its historical peak, indicating a significant drop in the network's ability to generate sustainable transaction fees. As Farmer pointed out:

"The trading volume of meme coins is both unsustainable and profit-driven."

Analysts warn that SOL price will fall below $1

Technical analyst Gert van Lagen noted that a double top pattern has emerged in SOL's price trend, supporting the possibility of a massive crash for Solana. On the weekly chart, van Lagen identified a key double top pattern in Solana's price, indicating that the meme season has come to an end.

The analyst also emphasized that Solana's unvoted transaction failure rate has risen to 75%. Given the bearish divergence and double top pattern, the analyst believes there is a high likelihood of falling below $1.