Price Analysis
  • Shayan Chowdhury
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    Shayan is a digital nomad and a professional journalist. He delivers high-quality engaging articles to Coinpedia through his in-depth research and analysis.

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Solana Surges Toward $140 Despite Bearish Network Activity: Will Sellers Defend SOL Price?

The cryptocurrency market has rebounded from concerns about a possible $9.4 billion BTC sale by Mt Gox, leading to a bullish momentum for various altcoins in the past day. The price of SOL has sparked buying interest, surpassing $140. Despite this rise, the gains may be temporary, as on-chain metrics and network activity for SOL indicate potential bearish trends.

Solanaโ€™s Address Stat Faces A Decline

Solana’s recent gains come amid a decrease in Bitcoin’s dominance in the crypto market, suggesting that traders are shifting their investments from BTC to leading altcoins. The Bitcoin Dominance Index saw a sharp drop of over 1.8% on June 25, marking its most significant daily decline since January.

According to data from Coinglass, the SOL price experienced a total liquidation of approximately $3.7 million, with contributions from traders on both sides. The data indicates that long-position holders accounted for about $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 noticeable decline in Solana’s active addresses, falling 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 a weaker trading sentiment and low chances for a major price movement.  

Additionally, Solana faced a drop in its new addresses as it declined from the high of 1.06 million to 920K. This suggests fewer people are joining the network, which could indicate a declining interest in trading on the platform. A reduction in new users can lead to less activity and might decrease the overall market engagement with Solana.

However, there’s bullish news as DeFiLlama reveals a rise in the 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 boost its price.

Whatโ€™s Next For SOL Price?

Solana has bounced back impressively from $122 and re-entered its descending channel pattern. Bulls are currently breaking above immediate Fib channels and are holding the price above the EMA20 trend line. As of writing, SOL price trades at $138, declining over 0.8% in the last 24 hours.

Bears might attempt to stop this recovery rally at the 100-day EMA ($141). If the price sharply reverses from this level, the SOL/USDT pair could drop to the critical support at $122 again. 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 drive 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. Breaking above this level could consolidate the price within $175-$192. 

Read Also: Bitcoin Price Forecast: What to Expect in the Coming Months?

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