Solana (SOL) has seen a significant decline in market sentiment after failing to sustain a 40% price increase. On November 5, SOL was trading at $161.93 and 17 days later, it reached a new all-time high.
However, while this rally has sparked excitement among investors, the lack of continued momentum has dampened optimism. This begs the question: Where will SOL price go in the near future?
Solana Market Sentiment Turns Bearish
The bearish sentiment towards Solana is clearly reflected in its market capitalization position. Two days ago, SOL was still the fourth-largest cryptocurrency by capitalization. However, it has now given way to Ripple (XRP) – a coin that has outperformed many other assets in the top 100.
This shift is also reflected in Solana's social metrics, including Weighted Sentiment, which measures how the market perceives a cryptocurrency.
When positive, this indicator shows that most comments about the altcoin are optimistic. When negative, it means that most comments related to the coin are pessimistic.
SOL Weighted Sentiment Index
According to data from Santiment, Solana’s Weighted Sentiment has dropped to negative levels, indicating that the majority of investors do not expect SOL’s price to increase in the short term. If this trend continues in the coming days, demand for SOL could continue to decline.
Another metric is Social Dominance, which measures how much discussion there is about a cryptocurrency compared to other assets in the market. When this metric increases, it is usually positive.
However, in the case of Solana, the Social Dominance index has dropped from 8.42% (on November 17) to 3.60% currently. This decline could make it difficult for SOL price to return to its all-time high in the short term.
SOL Social Dominance Index
SOL Price Forecast: No Way to Increase Again
Technically, the 20-period exponential moving average (EMA) has crossed below the 50-period EMA on the 4-hour chart. To explain, an EMA is a technical indicator that determines whether the trend is up or down.
When the short term EMA crosses up the long term EMA, the trend is bullish.
Conversely, when the short-term EMA crosses below the long-term EMA, the trend is bearish – commonly known as a “death cross”.
Currently, the price of SOL is trading below both of these important indicators, reinforcing the bearish outlook. This position suggests that the recent bounce may be just a “c”. If this is confirmed, the price of Solana is likely to drop to $213.15.
Conversely, if Solana’s social metrics turn positive, this trend could change. In that case, the SOL price could rally back to the $264.64 target.
SOL/USDT 4-hour chart
The decline in social indicators and market sentiment suggests that Solana will face many challenges if it wants to regain momentum in the coming time.
