Solana, the multi-purpose blockchain renowned for its DeFi services, is facing downward pressure despite increasing activity on its network. The price of its native token SOL is currently hovering around the crucial support at $160, a level that could determine the trend for the coming weeks. Investors closely monitor price action to anticipate the next major move.
Updated on 05/26/2024 at 3:34 p.m. by Léa
Solana: Why is growing network activity not boosting the price of SOL?
Despite an increase in activity on the Solana network, which now ranks 2nd in terms of daily active users (DAU) with 1.6 million users, SOL’s price has not followed the same trajectory. Indeed, SOL fell 4.2% over the last 7 days, thus breaking the correlation between network performance and price.
This phenomenon is not new for Solana, sincea similar scenario occurred on April 11. Daily transactions had jumped dramatically, without preventing a 20% price drop. This divergence raises questions about SOL’s current valuation and its ability to reflect the growth of the Solana ecosystem.
Technical analysis: support at $160 is key for SOL
On the technical side, Solana started the month of May with a consolidation phase. Which allowed it to break the $160 range on May 15 before starting an uptrend followed by a correction at $168.3 today. However, the price action failed to break out of the bearish zone and is now approaching support at $160, with trading volume down 15% over 24 hours.
At the time of writing, the SOL/USDT pair was trading at $164.30. Is above all the main moving averages, which gives strength to buyers. The other oscillators indicate a neutral movement in volatility.
The trend for Solana is bullish but losing momentum. The Relative Strength Index (RSI) at 40.73 is trending downward. Which indicates thatan accumulation phase could start soon. The MACD is still above its signal line, consolidating a strong hold near support zones.
Solana (SOL): Ready for an explosive move?
With immediate resistance at $183 and support levels at $160 and $147, price action is expected to remain neutral for some time. Traders have a buying opportunity in the upper $150 zone, with a stop loss at $147 and a profit target at $185.
The pullback resulted in the formation of a descending channel, creating a buying opportunity for traders. The price could break out of this channel at any time, so it is important to monitor support zones the nearest ones and wait for the resumption of the upward trend.
Solana price finds itself at a critical point with support at $160 being determining for the upcoming trend. Although network activity is increasing, the price is struggling to reflect this growth, creating a potential opportunity for patient investors.
Traders must closely monitor key levels And adapt their strategies depending on changing market dynamics. In the long term, if Solana continues to establish itself as a leading platform for dApps and DeFi, SOL’s price should reflect this growing adoption.
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