SOL price is showing signs of weakness as the stablecoin supply on the network keeps declining.

According to data from crypto.news, the 6th largest cryptocurrency by market cap has dropped 5% from its weekly and 21% from its highest point this month.

Solana (SOL) price drop comes as the total supply of stablecoins on the Solana network continued to shrink, dropping by 5.5% to $15.01 billion in the past 7 days. Since stablecoins often serve as the primary liquidity rail and capital base for on-chain trading, this decline signals waning investor demand and reduced capital inflows, adding to the bearish pressure on SOL.

This is happening as markets turned red, weighed down by renewed macro jitters stemming from escalating U.S.–China tariff tensions and the ongoing government shutdown. These developments have pushed investors away from risk assets for now, as many wait for clearer signals before re-entering the markets with conviction.

Traders are also in a wait-and-watch mode ahead of the U.S. CPI report due on Oct. 24, a key data point that could shape the Federal Reserve’s next move.

Originally delayed due to the government shutdown earlier this month, the report will also determine the 2026 Social Security cost-of-living adjustment and could sway market sentiment in a big way. If inflation comes in hotter than expected, it could put fresh pressure on crypto assets like Solana. On the flip side, a cooler CPI print might spark a broader relief rally across risk-on markets.

Solana price analysis

Amidst the broader market weakness and shrinking stablecoin supply, SOL price action also appears to present a bearish outlook on the 1-day chart.

Notably, the 20-day simple moving average has formed a bearish crossover with the 50-day one as it crossed below it. In technical analysis, this points to weakening momentum and a possible trend continuation to the downside.

SOL price has formed a bearish crossover on the daily chart — Oct. 23 | Source: crypto.news

As analysts at crypto.news reported earlier, Solana was trading below the 200-day EMA, a key dynamic level closely watched by both traders and investors. This level also aligns with a psychological resistance zone near the $200 mark.

For now, other technical indicators also seem to support the bearish bias. Notably, the Supertrend has flashed red, while the MACD lines have pointed downward, both signs of continued selling pressure.

Solana Supertrend and MACD chart — Oct. 23 | Source: crypto.news

At press time, Solana price was approaching a very crucial support level at $175.82. Bulls have previously stepped in to defend this area on multiple occasions.

A breakdown below it could pave the way for a significant correction, potentially sending SOL toward lower demand zones around $165 or even $150 if bearish momentum accelerates.

On the contrary, if Solana bulls manage to stage a rebound to $200, it could trigger a trend reversal, opening the door for a potential recovery in the near term.