The market has experienced significant volatility over the past 48 hours, leading to unstable conditions in both Bitcoin and the altcoin market. This volatility has particularly impacted Solana, leading to notable liquidations. As a result, a strong battle has been observed between buyers and sellers. Concurrently, various on-chain metrics for Solana have taken bearish positions, indicating a strong advantage for the bears.
Solana’s Active Address Faces Steep Decline
In the past day, the price of SOL has experienced significant fluctuations near the $140 level. According to Coinglass, Solana’s total liquidations exceeded $21 million, with long positions accounting for $15 million of this total. Meanwhile, Solana’s trading volume saw a massive 90% increase, reaching $3.5 billion, indicating a substantial rise in trading activity within a single day.
Nevertheless, amidst this volatility, various on-chain indicators have been flashing bearish trends. On-chain data reveals a downward trend in the number of active addresses. This metric fell from a weekly high of 1.59 million to a recent low of 1.44 million, a decline triggered by the recent market crash. Should the count of active addresses continue to decrease, there could be a sharp fall in the price chart in the coming days. Additionally, the value moved on-chain declined by billions in recent weeks.
A possible driver for Solana’s value could be the approval of a spot Ethereum ETF, which may occur as early as this week. Should it receive approval, it’s anticipated that billions of dollars will pour into these funds, similar to what occurred with Bitcoin earlier in the year.
Analysts suggest that following this event, the SEC may focus on spot Solana ETFs. VanEck has already submitted its application for a Solana ETF, and it is expected that other firms such as Blackrock, Franklin Templeton, and Ark Invest will soon seek approval for their own Solana funds.
What’s Next For SOL Price?
Solana is currently forming a bearish descending triangle pattern, which will be confirmed if the price breaks and closes below $118. However, bulls are strongly defending a decline below the immediate Fib channels. As of writing, SOL price trades at $137, declining over 0.7% in the last 24 hours.
On a positive note for the bulls, the RSI indicates a potential positive divergence, hinting that selling pressure may be declining. Should the bulls drive the price above the 20-day EMA, the SOL/USDT pair could rally towards the 50-day SMA ($153) and then approach the downtrend line.
A break above the trend line might send the price toward a retest of $188. Conversely, if the price declines from the 20-day EMA and falls below $118, it will solidify the bearish pattern. The pair might then drop to $80.
The strong recovery from $121 demonstrates that bulls are actively defending the $118 support level. If the price rebounds from its current position and climbs above $150, we might see a surge in buying demand.
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