Solana is facing a downturn in on-chain activity, with a noticeable decline in new and active addresses.
Despite a rebound to $138 with an 11% surge in the last 24 hours, the sustainability of Solana’s price recovery is in question.
While bulls aim to push Solana above the 200-day EMA at $150, the potential for increased selling pressure at lower support levels could drive prices down.
The Solana network is currently grappling with a decline in its on-chain activity, highlighted by diminishing trading interest. Following a market downturn that corrected SOL’s price to critical support levels, the value did rebound. However, persistently low on-chain metrics are causing investor anxiety about the durability of this recovery.
Decrease in Solana Network Engagement
Over the last 24 hours, SOL’s price saw a marked increase, leading to a significant amount of liquidations. According to Coinglass, there was a total of $13.2 million in SOL liquidations, with $9.5 million stemming from short positions being covered.
Furthermore, The Block’s data dashboard indicates a notable 14.7% reduction in new addresses over the past 15 days—from a high of 915,000 to 780,000. Such a downturn in new and active addresses, which have dropped from 1.21 million to 1.1 million, suggests waning user engagement and transaction activity, potentially diminishing investor confidence and lowering demand for SOL.
Analysts are skeptical about the continuation of the current recovery in SOL’s price as it nears resistance channels without adequate buying pressure, hinting at a possible reversal for Solana.
The current market scenario reveals that while the bears have not been able to stop a recent rebound at the $120 mark—indicating continued bullish control—the upcoming resistance near the 200-day EMA at $150 is expected to be a contentious zone where sellers may robustly counter any further advances.
What Lies Ahead for SOL?
As it stands, SOL trades at $138 after an 11% increase in the past day. If the bulls can successfully propel the price above the $150 mark, it could surprise the bears and possibly trigger a short squeeze.
However, if Solana fails to maintain support around the $116-$120 range, the selling pressure could intensify, possibly pushing the SOL/USDT pair down towards $100, which would further delay the onset of a new bullish trend. For bulls to reclaim momentum, a swift move above the $150 level, targeting the 50-day SMA at $166, is crucial.
