Amid the ongoing downturn in the overall Cryptocurrency market, Solana (SOL) price is trading at $133 with daily gains of 2.44%, weekly losses of 7.29%, and monthly losses of 2.85% (at the time of writing).
Beyond the current general crypto market decline, we can mention a few key factors that are driving SOL lower:
For example, the current drop coincides with a SOL token liquidation by the people behind the memecoin launchpad Pump.fun. Exactly, they sold $1.38 million worth of SOL. Although In total they have sold $41.64 million in SOL.
It doesn’t seem like the cryptocurrency’s fall is necessarily due to such a liquidation. However, another coincidence that analysts relate to the token’s current price movement is the rise of memecoins on Solana.
Various experts and commentators believe that since users began massively launching tokens on Pump.fun, SOL stopped rising.
The argument here is that overemphasis on these low-quality tokens led to a decrease in money flow into SOL, thus rendering the ecosystem less useful.
However, it is worth noting that beyond what has been said, there is no solid evidence to support this hypothesis. In addition, the price of this token has been highly correlated with that of BTC and this correlation explains the current movements well.
On the other hand, there is currently little reason to push SOL’s price higher. We can only talk about the launch of Brazil’s first SOL ETF on August 7, which could set precedents for other global jurisdictions.
SOL Price Chart Analysis
Since March, the price of the SOL token has been trading sideways, already on the downside, after it was unable to break above the 209 USD line.
However, in the short term, SOL is moving in a downtrend since the price reached $162.2 and was rejected from those levels.
A key level in this context is $126, which was breached several times during the current fall, but the bulls seem to be in control below it, so the price has successfully recovered.
Further down, there is support around $122, which if lost could push the price towards $114.
However, the real strong support here is $110, a key level to watch and which only an extremely bearish scenario could topple.
As for resistance, we should look at $130 or the EMA 20 level, which could pause the daily bearish momentum. Then we can look at levels such as $141.19 or the EMA 200 level, which would also break the short-term bearish trend.
The last resistance we will talk about is $162, a level where the price was rejected on several occasions and was the origin of the current bearish momentum.
The RSI at 42 shows that the price is not oversold, so the bears might have more opportunities to push SOL lower.
Other useful data on the price of SOL
It is worth noting that beyond memecoins there are other factors and data to take into account to understand the current fall.
For example, the price of SOL follows trends of other altcoins, reflecting that what is simply happening is that Right now investors prefer to stay away from assets considered risky due to the current macroeconomic context..
On the other hand, the number of active addresses on Solana fell from 54 million to 18 million between July and August. A reduction that is quite drastic for the Blockchain.
We can also mention the trading volume on decentralized exchanges. Since on this platform, the trading volume of SOL has also decreased dramatically from August to the present.
That is to say, on August 4, 2024, SOL transactions on DEXs reached a value of $3.5 billion, while on the previous day the figure dropped to $700 million, an abysmal difference in just one month.
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