The price of Solana’s native SOL token has slumped to a 45-day low amid a broader cryptocurrency market downturn that has seen the space lose more than $100 billion in value. SOL is however underperforming the broader market.
According to popular cryptocurrency analyst TOBTC, Solana’s underperformance can be attributed to its reduced on-chain activity and “lack of demand for leveraged positions”, as well as “competition from other smart contract-focused blockchains” such as Ethereum, Arbitrum and BNB Chain.
The analyst predicted that Solana could fall below the $130 support level with an increase in demand or institutional support.
Solana’s #SOL token fell to a 45-day low, underperforming the broader cryptocurrency market with a decline of 24% since June 7.
The price weakness is attributed to reduced on-chain activity, lack of demand for leveraged positions and competition from other smart… pic.twitter.com/mpw38HSWO4
— TOBTC (@_TOBTC) June 18, 2024
Notably, the co-founder of the popular cryptocurrency derivatives trading platform BitMEX, Arthur Hayes, has set the cryptocurrency community abuzz with his prediction that Aptos (APT) will overtake Solana as the second-largest layer 1 (L1) blockchain ) most important, behind only Ethereum. within the next two-three years.
Solana rose to prominence in 2020 as she addressed Ethereum’s limitations in scalability, transaction speed, and costs. The boom came after Circle expanded its USDC stablecoin onto the Solana network, in a move that came shortly after the addition of Tether’s USDT.
Read also: AI Prediction: Ethereum (ETH) vs Solana (SOL) – which is probably the best buy for the rest of 2024
The price of the cryptocurrency collapsed as prior to the collapse FTX had heavily supported the Solana ecosystem and was heavily invested in a number of tokens on the network, including SOL itself. The collapse hit the Solana association, but the network has steadily recovered.
Solana’s rise to prominence was further accelerated with the launch of memecoins such as BONK in December 2022 and dogwifhat (WIF) in November 2023. Solana’s ecosystem has seen growing adoption, with its Saga smartphone, which once had been experiencing slow sales, recently sold out due to a profitable profit. 30 million BONK token airdrop for every new phone owner.
Solana price analysis
At the time of writing, Solana is trading below the $140 mark after losing more than 25% of its value in the last 30 days and more than 10% in the last week alone. Since the beginning of the year, the cryptocurrency has grown by approximately 37%.
Technical analysis suggests that there is ongoing bearish sentiment affecting Solana, as its price is below 50-SMA and above 200-SMA on the yearly chart, which also indicates long-term bullish sentiment.
Its Relative Strength Index (RSI) is currently around 39, in oversold territory, and trending lower as bearish momentum hits the cryptocurrency space as a whole. The Moving Average Convergence and Divergence (MACD) line has also crossed the signal line in a bearish signal.
SOLUSD chart via TradingView
The chart also shows that Solana has a support level around the recent low seen near $132.5, and another support around its 200-SMA near the $100 mark. Resistance currently sits at $150.75, near the 50-SMA.
Featured image via Unsplash.
