Solana
Will sellers defend the SOL price?
The cryptocurrency market rebounded following concerns over a possible $9.4 billion BTC sale by Mt Gox, leading to bullish momentum for various altcoins over the past day. The SOL price has attracted buyer interest, surpassing $140. Despite this uptick, the gains may be temporary as on-chain metrics and network activity for SOL indicate potential downtrends.
Solana’s address statistics face decline
Solana’s recent gains come amid declining dominance of Bitcoin in the crypto market, suggesting traders are shifting their investments from BTC to major altcoins. The Bitcoin Dominance Index saw a sharp decline of over 1.8% on June 25, marking its largest daily decline since January.
According to data from Coinglass, SOL price saw a total liquidation of around $3.7 million, with contributions from traders on both sides. The data indicates that long position holders accounted for around $1.7 million of this liquidation, while sellers liquidated positions worth $2 million.
The latest on-chain metrics for SOL suggest a downward trend. Over the past five days, there has been a notable drop in active Solana addresses, from a high of 1.62 million to a low of 1.5 million. This reduction in user activity, likely influenced by recent market volatility, has led to weaker trading sentiment and low chances of a major price move.
Additionally, Solana faced a drop in its new addresses, dropping from a high of 1.06 million to 920,000. This suggests that fewer people are joining the network, which could indicate a decline in interest for trading on the platform. A reduction in new users may result in decreased activity and could decrease overall market engagement with Solana.
However, there is some optimistic news as DeFiLlama reveals an increase in total value locked (TVL) for Solana’s network, reaching $4.2 billion as of June 26. This increase shows that more people and developers are getting involved and trusting the Solana ecosystem, which has helped increase its price.
What’s next for the SOL price?
Solana has rebounded impressively from $122 and re-entered its descending channel pattern. The bulls are currently surpassing the immediate Fib channels and holding the price above the EMA20 trendline. At the time of writing, SOL price is trading at $138, down over 0.8% in the last 24 hours.
The bears could attempt to halt this rally at the 100-day EMA ($141). If the price reverses sharply from this level, the SOL/USDT pair could once again fall towards the critical support at $122. The bulls are likely to protect this level because if it breaks, the price could fall further to $100.
On the other hand, if the bulls manage to push the price above the 100-day EMA, it would indicate that the selling pressure is easing. This could lead the pair to rise towards the resistance line of $159. A breach of this level could consolidate the price between $175 and $192.