The phrase "falling knife" usually describes a sharp, rapid price drop where trying to buy the "bottom" is dangerous because the floor hasn't been found yet. For Solana ($SOL) as of December 24, 2025, the "danger" signals on the chart come from a combination of technical breakdowns and a sharp decline in network activity.
🚩 Why the Chart Screams "Danger"
* Failed Support at $126: SOL recently broke below a critical psychological and technical support level of $126. This breakdown from a "rectangle formation" is a classic bearish signal that often leads to further selling.
* Network Activity Collapse: On-chain data shows a staggering 97% crash in network activity during Q4 2025 (dropping from 30 million active traders to under 1 million). Without user demand, price appreciation lacks a fundamental foundation.
* Institutional Outflows: Capital is rotating out of Solana and into rivals like XRP ETFs, which have seen massive inflows. This "liquidity drain" makes it harder for SOL to mount a recovery.
* Bearish Momentum: Key indicators like the MACD are negative, and the RSI (43) is stuck below the neutral 50 level, showing that sellers are firmly in control.
📉 Key Levels to Watch
| Level | Sentiment | Outlook |
|---|---|---|
| $130 - $133 | Resistance | SOL must break above this and the 30-day SMA to negate the bearish trend. |
| $120 - $122 | Immediate Floor | If this fails, the "knife" could drop much faster. |
| $111 - $103 | Next Targets | Analysts see these as the next likely landing zones if the current slide continues. |
The Bottom Line: The "danger" lies in the fact that SOL is currently in a "Strong Down" trend on short and medium timeframes. Until the price can stabilize above $130 with high volume, buying the dip is high-risk.
Would you like me to look up the latest liquidation data to see where the next "squeeze" might happen?
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