Solana (SOL) Takes a Breather After July’s Wild Ride – Can $178 Hold the Line?

Solana's rocket-fueled July rally hits the brakes as traders eye a critical support level. The $178 zone now becomes make-or-break territory for the high-speed blockchain.

Will the 'Ethereum killer' defy gravity or face a reality check? Let's break it down.

The Cooling-Off Period

After scorching gains last month, SOL's charts show traders taking profits. The pullback was inevitable – even crypto's fastest blockchain needs to refuel sometimes.

Support Watch: $178 or Bust

Technical analysts have drawn their battle lines at $178. A clean hold could signal another leg up, while breakdown might trigger flashbacks to 2022's crypto winter.

Meanwhile, Bitcoin maximalists are already sharpening their 'I told you so' tweets – because nothing makes old-money crypto bros happier than watching altcoins struggle.

SOL Price Surge Boosted On-Chain Growth in July

Between July 1 and 22, Solana rallied by over 40%, lifting investor sentiment and driving increased activity across its decentralized finance (DeFi) ecosystem.

• Total Value Locked (TVL): Solana’s TVL rose by 14% in July, reaching $9.85 billion according to DefiLlama. This shows users were locking more assets in Solana-based lending platforms and vaults.

• DEX Trading Volumes: DEX volumes jumped by 30%, hitting over $82 billion in trading activity. This spike reflected increased investor participation and speculation around SOL’s rising price.

• Revenue Growth: The Solana network generated $4.3 million in protocol revenue in July, up 13% from June’s $3.81 million, showing growing usage and demand.

All of this pointed to a healthy and expanding Solana ecosystem — at least until late July.

Network Activity Shows Early Signs of Cooling

As August begins, key metrics indicate a slowdown across Solana’s on-chain environment. This pullback in usage may suggest a weakening in support for higher prices.

• Price Pullback: SOL is now trading around $180, after slipping from the July peak above $200.

• Daily Active Addresses: According to Artemis data, Solana’s daily active user count has dropped 16% in the past 7 days, signaling lower transaction volumes and dApp usage.

• TVL Decline: After peaking mid-month, Solana’s DeFi TVL has dropped 8% in the last week, indicating that users are either withdrawing funds or that market value of assets is falling.

These metrics suggest investors may be taking profits after July’s rally, leading to short-term bearish sentiment.

Key Technical Level: Will $178 Hold?

From a technical standpoint, Solana is now testing its 20-day exponential moving average (EMA) — a dynamic support level currently positioned at $178.25.

• Current Price: At press time, SOL trades at $180.51.

• Support Risk: If SOL breaks below the 20-day EMA, it could signal deeper weakness and push the price down toward $171.78, the next strong support zone.

• Upside Potential: If buyers step in and sentiment improves, SOL could climb back to $186.40, and then toward $190.47, a key resistance from late July.

How SOL reacts around this critical support zone will likely shape its price action through the rest of August.

Market Sentiment: Mixed Signals Ahead

The broader crypto market will also influence Solana’s path in August. Much depends on whether Bitcoin (BTC) and ethereum (ETH) can maintain stability or push higher.

• If sentiment remains weak, SOL may continue to decline, especially if trading volumes and user activity keep falling.

• If market sentiment turns bullish, and Solana’s ecosystem metrics rebound, the altcoin could resume its rally and retest the $200 mark.

Conclusion: Key Watch Points for SOL in August

Solana had a strong July fueled by increased on-chain participation, DEX trading, and revenue growth. However, early August data indicates a pause in that momentum. As the price nears the critical $178 support level, investors should monitor the following:

• Daily active addresses and DEX volumes

• DeFi TVL trends

• Technical support around $178

• Broader crypto market sentiment

If support holds and activity picks back up, SOL could see renewed upside. But if network activity continues to drop, a short-term correction toward the low $170s remains a real possibility.

Either way, August could be a key month for determining whether Solana’s bullish trend is sustainable — or just a temporary spike.