Solana (SOL), the high-speed blockchain network, has been on a rollercoaster ride in recent weeks. Despite a broader market downturn that saw Bitcoin (BTC) plummet over 8% in the last 24 hours, Solana found itself at a critical juncture.
At press time, SOL hovered around $124, a significant support level. This price point held particular importance as it coincided with the 200-day Exponential Moving Average (EMA), a technical indicator used to gauge long-term trends.
Interestingly, SOL’s daily chart presented a glimmer of hope. Analysts identified two bullish patterns: a double-bottom formation and a bullish divergence on the Relative Strength Index (RSI). The double-bottom pattern suggests a potential price reversal, while the bullish RSI divergence indicates a weakening selling pressure despite the falling price.
However, a sense of cautious optimism is warranted. In May 2024, SOL exhibited a similar pattern at the same price point, followed by a significant surge. Could history repeat itself? If so, then SOL investors might be in for a treat, with a potential price jump exceeding 22% and reaching the much-anticipated $160 mark in the coming days.
Despite the optimistic technical signals, a conflicting narrative emerges when we consider investor sentiment. Open Interest (OI), a metric reflecting outstanding derivative contracts, has dipped by 7% in the last 24 hours. This data point suggests waning interest from investors and traders in this volatile market.
Furthermore, Coinglass reported a significant liquidation event, with SOL ranking as the third-highest asset impacted. This liquidation amounted to a staggering $25.5 million, raising concerns about investor confidence. Bitcoin and Ethereum bore the brunt of the liquidation wave, with SOL coming in a close third.
Looking at SOL’s current performance, the coin trades near $126, reflecting a 7% decline in the last day. Interestingly, trading volume surged by 36%, indicating continued participation from investors and traders despite the price drop.
Zooming out, SOL’s performance paints a bleaker picture. Over the past week, the coin has shed more than 11% of its value. The losses are even steeper when considering a 30-day window, with SOL down nearly 26%. Notably, Solana-based altcoins like Render (RNDR), Bonk (BONK), and Pyth Network (PYTH) mirrored SOL’s downward trajectory.
Solana’s future trajectory remains uncertain. While technical indicators hint at a potential price surge, broader market forces and declining investor sentiment pose significant challenges. Only time will tell if SOL can defy the odds and reach the coveted $160 mark in July.
