Solana Price Faces Downward Pressure as Network Activity Declines
Solana’s price has been experiencing a downtrend since mid-September, with network activity continuing to decline during this period. This decline has raised concerns among investors, with the sixth-largest crypto asset facing significant challenges.
Key Statistics and Trends
Solana (SOL) has seen its price drop by over 50% from its September high, with its current price at $139.75 and a market cap of $77.4 billion. The daily trading volume has also fallen by 20% to $6.85 billion in the last 24 hours. Some key statistics and trends include:
- Solana price is down over 50% from its September high.
- Solana’s TVL and stablecoin supply has declined in recent months.
- A huge rounded top pattern has formed on the daily chart.
Market Sentiment and On-Chain Data
The altcoin’s decline began in September, a period often referred to as “Red September” that significantly impacted many altcoins. Concerns about inflation, changing interest rate expectations, and global economic uncertainty have also dampened investor interest in riskier assets such as cryptocurrencies. A closer look at Solana’s on-chain data reveals that the total value locked across DeFi-based protocols on the Solana blockchain has fallen to $25.8 billion from $35.4 billion around mid-September. The total supply of stablecoins on the network has also shrunk by almost 20% from its annual high in October to around $13 billion at press time.
Technical Analysis and Price Projections
Decreasing TVL and shrinking stablecoin reserves on the network suggest that capital is steadily flowing out of the Solana ecosystem. Therefore, investors could likely withdraw liquidity or reduce exposure if risk sentiment deteriorates further. On the daily chart, Solana price has formed a huge bearish rounded top pattern that is taking shape as the price gradually peaks over time, forming a dome-like structure. This pattern is typically a harbinger of deeper losses as momentum weakens and buyers lose strength.
Solana price has formed a huge rounded top pattern on the daily chart – November 19 | Source: crypto.news
More importantly, a death cross also appears to be looming as the 50-day Simple Moving Average approaches an intersection with the 200-day moving average. While a death cross is a lagging indicator, in the context of Solana’s recent price action and bearish round top pattern, it represents a very bearish scenario for the token. As a result, Solana price is at risk of falling to $120, a key support level where buyers have often intervened in previous downturns. Should it lose this level, a decline to $95 becomes increasingly likely, which is the price level last seen in early April this year.
Conclusion and Disclaimer
In conclusion, Solana’s price decline and declining network activity have raised concerns among investors. The formation of a bearish rounded top pattern and the looming death cross further support the bearish scenario. Investors should exercise caution and consider the potential risks and challenges facing the Solana ecosystem.
Disclosure: This article does not constitute investment advice. The content and materials presented on this site are for educational purposes only. For more information, please visit https://crypto.news/solana-price-risks-crash-to-120-as-it-forms-a-bearish-rounded-top-pattern/
