Will Solana (SOL) Actually Crash 30% Against Ethereum in Q3? Read CoinChapter.com on Google News
NOIDA (CoinChapter.com)— If technical setups prove correct, the price of Solana (SOL) might drop in the upcoming quarter. SOL’s recent rally has lost steam, struggling to maintain momentum amid declining transaction counts on its network. The token’s price action shows signs of exhaustion against Ethereum (ETH), with a potential 30% drop looming in Q3.
Key technical indicators suggest further downside risks as bearish signals emerge.
SOL ETH Price Action Spells Doom
The SOL ETH pair is moving inside an ascending parallel channel construct, nearing the pattern’s upper trendline resistance. If the token rebounds off the resistance trendline, or should the pair lose momentum, the SOL ETH pair could drop to the channel’s support.
SOL ETH pair risks a drop of over 33%. Source: Tradingview
Dropping to the support line would trigger a nearly 33% fall in the SOL exchange rate against ETH, bringing the pair to a projected price target near 0.04 ETH, or $107.5. For context, SOL price was trading at $159 at the time of writing.
Furthermore, the SOL/ETH pair is showing a classic bearish divergence on the daily chart. While the price has been making higher highs, the RSI has failed to follow suit, instead creating lower highs. This divergence suggests weakening bullish momentum, signaling potential downward pressure ahead.
Traders often view this as an early warning of a possible trend reversal. The current uptrend could lose steam, leading to a price correction or a shift toward a bearish trend.
Declining Activity and Its Impact on SOL’s Bearish Outlook
The Solana network has recently experienced a significant drop in transaction fees, largely driven by a decline in memecoin trading. This downturn reflects reduced speculative interest and could also be a harbinger of broader challenges for SOL’s price trajectory.
As memecoins like Dogwifhat, Bonk, and others lose momentum, the network’s transaction volume—once a cornerstone of Solana’s vibrant activity—has been severely impacted.
Moreover, the reduction in network usage is likely to diminish SOL’s appeal, particularly for investors who rely on staking rewards and other on-chain activities that thrive on high transaction volumes.
SOL transaction fees have been plummeting. Source: The Block
From a technical perspective, the declining activity fuels the bearish divergence already observed in SOL/ETH pair charts. As the price struggles to maintain its upward momentum, with RSI weakening, the diminishing memecoin activity serves as an additional layer of bearish confirmation.
This trend suggests that the demand for SOL could further wane, leading to sustained downward pressure on the token’s price. If the network fails to find new catalysts to drive activity and engagement, SOL could be vulnerable to a significant correction, potentially validating the anticipated 30% drop in Q3.
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