Solana’s Price Could Dip Due to Decreased On-Chain Activity and Market Retraction
Solana has exhibited a period of sideways trading within a symmetrical triangle formation, indicating a phase of consolidation that could potentially lead to a continuation of the preceding trend. Recent on-chain data reflects a noteworthy decline in new addresses and active addresses, signifying waning user engagement and potential downward pressure on the price.
Technical indicators also align with a bearish perspective for Solana. The 20-day exponential moving average (EMA) crossing below the 50-day EMA indicates heightened selling pressure. Furthermore, the price experienced a 7.5% decline, dropping from $164 to $151 during a period of low volatility over the weekend.
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Notwithstanding these bearish signals, the symmetrical triangle pattern on the daily chart may serve as a support against a significant downtrend. A rebound from the support levels of the triangle could prolong the sideways movement and potentially trigger another upsurge. Conversely, breaching the $150 support level could result in a 16.5% decline, testing the lower boundaries of the triangle around $126.
Solana encounters challenges stemming from diminishing on-chain metrics and bearish technical indicators. However, the symmetrical triangle pattern presents a ray of optimism. Positive market sentiment and the stability of support levels could potentially help Solana avert a major correction. It is imperative for investors to diligently monitor these patterns and metrics to make well-informed decisions within a volatile market
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Meet Daniel Abang: Crypto guru, content creator, and analyst. With a deep understanding of blockchain, he simplifies complex concepts, guiding audiences through the ever-changing crypto landscape. Trusted for his insightful analysis, Daniel is the go-to source for staying informed and empowered in the world of cryptocurrency.
