Solana (SOL) has recently faced a severe price trend, with its decline slowing down, but the altcoin is struggling to reclaim the $200 support level.
Despite Solana's demand exceeding Ethereum's in recent months, this difficulty persists, highlighting the disconnect between interest and price action.
Solana has outperformed Ethereum.
Solana's demand has consistently exceeded Ethereum's, as evidenced by the popular realized market cap metric. According to Glassnode's report, SOL's popular realized market cap reached $9.5 billion this week, more than double Ethereum's $4.1 billion. This indicates sustained investor interest and increasing activity within the Solana network.
Glassnode notes: "When comparing the scale of new capital entering Solana and Ethereum, we can observe that demand from new investors for Solana has surpassed that for Ethereum for the first time ever, highlighting its strong demand condition. Notably, the sharp rise in Solana's hot realized market cap before the beginning of 2024 marks an inflection point for the SOL/ETH ratio, driven by the influx of new capital that propelled growth."
Solana's macro momentum presents a mixed outlook. The change in realized market cap for SOL has only increased by 2.19%, significantly lower than Bitcoin's 10.87% and Ethereum's 5.43%. This difference underscores the faster loss of momentum for Solana compared to the two major cryptocurrencies.
The slowdown in realized market cap growth indicates a bearish short-term outlook, suggesting that Solana's network activity has not kept pace with its growing demand. For SOL to regain stronger momentum, a revival in realized market cap growth and broader market support is needed.
SOL Price Prediction: Facing Resistance Ahead
Solana's price is currently struggling to reclaim the $200 support level, trading at $185 at the time of writing. This aligns with a short-term bearish outlook, indicating that SOL may continue to face resistance in breaking through key psychological levels.
Solana hovers above the support level of $175, remaining in an unstable state. Losing this support could lead the altcoin to face a correction, with $155 becoming the next significant support level. Such a decline would deepen bearish sentiment and delay any attempts at recovery.
However, positive market signals may allow Solana to convert the $200 level into support, thereby invalidating bearish arguments. Achieving this milestone could trigger a rebound to $221 or higher, restoring confidence in the upward trajectory of the cryptocurrency. Sustained demand and broader market optimism will be key drivers of this scenario.