The cryptocurrency market has rebounded from concerns about the potential sale of $9.4 billion in BTC by Mt Gox, leading to bullish momentum across various altcoins over the past day. The price of SOL has sparked buying interest, breaking above $140. Despite the gains, the gains may be temporary as SOL’s on-chain metrics and network activity indicate an underlying bearish trend.
Solana’s Address Statistics Face Decline
Solana’s recent gains come at a time when Bitcoin’s dominance in the cryptocurrency market is declining, suggesting that traders are shifting investments away from BTC and toward leading altcoins. On June 25, the Bitcoin Dominance Index plunged more than 1.8%, its biggest one-day drop since January.
According to Coinglass, the SOL price experienced a total of about $3.7 million in liquidations, with traders on both sides contributing. The data showed that long position holders accounted for about $1.7 million of the liquidations, while sellers liquidated positions worth $2 million.
SOL’s latest on-chain metrics show a downward trend. Over the past five days, Solana has seen a noticeable decline in active addresses, falling from a high of 1.62 million to a low of 1.5 million. The decrease in user activity may be due to recent market volatility, which has led to weaker trading sentiment and a lower likelihood of large price fluctuations.
Additionally, Solana has also seen a decline in the number of new addresses, from a high of 1.06 million to 920,000. This means that fewer people are joining the network, which could indicate a declining interest in trading on the platform. A decrease in new users could lead to a decrease in activity and potentially reduce Solana’s overall market participation.
However, there is also good news, DeFiLlama revealed that the total locked value (TVL) of the Solana network has increased, reaching $4.2 billion as of June 26. This growth shows that more and more people and developers are participating in and trusting the Solana ecosystem, which helps to increase its price.
Where will the SOL price go next?
Solana rebounded strongly from $122 to re-enter the descending channel pattern. The bulls are currently breaking above the immediate Fib channel and holding the price above the EMA20 trendline. As of writing, the SOL price is $138, down more than 0.8% in the past 24 hours.
The bears might try to stall this recovery rally at the 100-day EMA ($141). If the price sharply reverses from this level, the SOL/USDT pair might again dip to the critical support at $122. The bulls are likely to protect this level because below it, the price could fall further to $100.
On the other hand, if the bulls succeed in pushing the price above the 100-day SMA, it will suggest that the selling pressure is easing. This could lead the pair to rise to the $159 resistance line. A breakout of this level could see the price consolidating between $175-192.