Solana (SOL) Price Hits 45-Day Low Amid Broader Correction After Dropping 25% in a Month

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As a crypto investor with some experience in the market, I’ve seen my fair share of ups and downs, especially when it comes to Solana (SOL). The recent price drop below a 45-day low is disheartening, especially since SOL has underperformed the broader cryptocurrency market with a 24% decline since June 7.

The cost of Solana’s SOL token, its native currency, has dropped to a 45-day minimum, coinciding with a broader cryptocurrency market slump that has resulted in over $100 billion in losses. However, Solana’s SOL is performing poorer than the overall market.

Based on the analysis of noted cryptocurrency expert TOBTC, Solana’s subpar performance can be explained by decreased on-chain activity and a paucity of interest in leveraged positions. Additionally, intense competition from other blockchains specializing in smart contracts, such as Ethereum, Arbitrum, and BNB Chain, further contributes to this trend.

The analyst foresaw that Solana might dip beneath the $130 mark if there was an increase in buying pressure or intervention from larger investors.

The value of Solana’s SOL token has dipped to its lowest point in the past 45 days, with a 24% decrease since June 7. This underperformance versus the broader crypto market is believed to be due to decreased on-chain activity, waning demand for margin trading, and stiff competition from other smart contract platforms.— TOBTC (@_TOBTC) June 18, 2024

Arthur Hayes, the co-founder of BitMEX, has caused a stir in the cryptocurrency world by predicting that Aptos (APT) could potentially surpass Solana as the second-largest Layer 1 (L1) blockchain, ranking only behind Ethereum, within the next 2 to 3 years.

As a Solana analyst, I can tell you that this blockchain platform gained significant attention in 2020 due to its solution to Ethereum’s challenges in handling scalability, transaction speed, and cost issues. The surge in popularity came following Circle’s decision to integrate USDC stablecoin on the Solana network, which was closely followed by Tether adding its USDT stablecoin.

When FTX, a significant supporter and investor of the Solana ecosystem, unexpectedly collapsed, the value of Solana’s cryptocurrency took a nose dive. Although Solana itself was one of the investments at stake, the broader impact extended to the entire ecosystem due to their strong connection. However, Solana has been making strides towards recovery.

As a researcher studying the blockchain industry, I’ve observed an intriguing development in the Solana ecosystem. The launch of memecoins like BONK in December 2022 and dogwifhat (WIF) in November 2023 has significantly boosted Solana’s rise to prominence. This surge in attention has led to increased adoption, as evidenced by the recent sell-out of Saga smartphones. The phones, which had previously struggled with sales, were snapped up due to a lucrative offer of 30 million BONK tokens for each new owner.

Solana Price Analysis

At present, Solana’s price hovers around $130, having dropped by over 25% within the last thirty days and over 10% in the recent week. However, it’s important to note that this digital currency has seen a significant increase of approximately 37% since the beginning of the year.

Based on technical analysis, it appears that Solana is experiencing persistent bearishness, with its price currently below the 50-day moving average (SMA) but above the 200-day SMA on the yearly chart. This configuration suggests a potential long-term bullish outlook for the cryptocurrency.

The cryptocurrency’s Relative Strength Index (RSI), which is an indicator of its overbought or oversold status, stands at approximately 39. This value places it in the oversold territory, suggesting that the asset may have been sold heavily and could be due for a potential rebound. Furthermore, the downward trend of the RSI indicates bearish sentiment prevailing in the cryptocurrency market. Additionally, the MACD line, another common technical indicator, has crossed below its signal line, signaling a bearish move.

The graph indicates that Solana has two areas of support: one approximately at its previous low of $132.5, and another around its 200-day moving average, which is around $100. On the other hand, resistance can be found close to $150.75, where the 50-day moving average resides.

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2024-06-20 18:25