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The Solana network is struggling to maintain its on-chain business amid declining commercial interest. Recently, the crypto market witnessed a crash that led to a correction in the price of SOL, pushing its value towards support levels. Although SOL price subsequently rebounded, continued weakness in on-chain data is raising concerns among investors about the sustainability of this upward move.
Solana faces decline in new and active addresses
Over the past 24 hours, the price of SOL has seen a significant rise, leading to a significant wave of liquidations from sellers. Data from Coinglass reveals that there were a total of $13.2 million in SOL liquidations, with approximately $9.5 million coming from the liquidation of short positions.
The Block's data dashboard reveals that the Solana blockchain has recently seen a notable decrease in the number of new addresses. Over the past 15 days, the number of new addresses has decreased by 14.7%, from a weekly high of 915,000 to 780,000.
Also read: Solana on the verge of breakdown! Will SOL Price Hit $100 This Week?
Typically, a large influx of new addresses is a sign of healthy network growth and increased utility, which in turn can increase the value of Solana. Conversely, a slowdown like the current trend may raise concerns among investors, as it could reflect issues such as a decline in blockchain's appeal, potential technical challenges, or increased competition from blockchain. other blockchain platforms. Thus, SOL price may struggle in its ongoing recovery efforts.
Additionally, the decrease in the number of active addresses on the Solana blockchain from a high of 1.21 million to 1.1 million has an additional negative impact on the SOL price. This decline suggests a decrease in user engagement and transaction activity, which may weaken investor confidence and potentially reduce demand for SOL.
Analysts predict that the current rally in SOL price may soon stall as it approaches resistance channels without sufficient buying pressure, which could lead to a reversal for Solana.
What’s next for the SOL price?
The bears' inability to stop a rebound to $120 for Solana indicates that the bulls continue to dominate the market. The bulls continue to move above the immediate Fib channels and push SOL price towards its crucial resistance near the 200-day EMA at $150. However, sellers should strongly defend a rise above this trendline. At the time of writing, SOL price is trading at $138, up over 11% in the last 24 hours.
On the bearish side, there is slight support between $116 and $120, but if this threshold is breached, the pace of selling could intensify, which could push the SOL/USDT pair down to $100. A larger decline could delay the start of the next uptrend.
For bulls to regain momentum, they must quickly send the price above the 200-day EMA, currently at $150. This move could surprise aggressive bears, potentially triggering a short squeeze. Following this, the pair could target the 50-day SMA at $166.
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