As the market lost its previous momentum after Bitcoin price losing its $70K milestone, several altcoins have lost their dominance. The market has seen its first downturn in a while last week, as the substantial investments that were flowing into Bitcoin exchange-traded funds (ETFs) have shifted towards withdrawals. This shift in trend has pushed the price of BTC down towards $60K, along with altcoins to their support lines. After SOL price lost its $200 level, it saw a decline in crucial on-chain metrics, concerning long-term holders.
Bears Gain Confidence Following SOL’s Decline
In the past 24 hours, the crypto market has seen total liquidations exceed $159 million, with sellers clearing out over $101 million in positions. Remarkably, Solana experienced a significant short squeeze, with nearly $7.1 million worth of short positions being liquidated.
Even with its recent bullish comeback, Solana faces potential threats that might impede its rise, as bearish patterns emerge from on-chain metrics. Latest data points to a marked decline in Solana’s demand, highlighted by the drop in active addresses from 1.61 million to 1.33 million, signaling a decrease in user engagement. Additionally, the number of new addresses created on the Solana network dropped from 1.25 million to 1.01 million.
Moreover, there’s been a noticeable reduction in transaction fees for [ccpw id=60497], falling from $5.08 million to $2.07. This dip in fees could weaken buyer enthusiasm, possibly giving sellers more leverage in influencing Solana’s market price.
Since September 2023, the price of Solana has surged by an astonishing 1022%. This explosive growth is primarily attributed to two factors: the bull run of [ccpw id=60415] and the excessive selling of SOL, which was closely linked to the now-defunct cryptocurrency exchange FTX. Just last week, Solana experienced a remarkable 40% increase, marking the largest weekly gain of 2024.
However, current bearish metrics may trigger a price correction for SOL. Currently, the long/short ratio for Solana is experiencing a decline, dropping to a present figure of 0.8477. This shift suggests a growing bearish outlook, with around 54% of positions positioned in anticipation of a decline in price.
Amid the volatile price movements of SOL, the sentiment within the Solana ecosystem has largely stayed positive.
The Weighted Sentiment chart by Santiment measures the prevailing mood in social media discussions about a specific cryptocurrency project by balancing the scale of positive remarks against negative ones. Since March 5, the Weighted Sentiment for Solana has maintained a trend towards positive territory.
Values above 1 on the Weighted Sentiment scale indicate that positive commentary about the project significantly outweighs the negative, showcasing an overall bullish outlook.
What’s Next For SOL Price?
Currently, the bulls are in command of the market trends, with investors aiming to push past the resistance threshold in the coming hours. Yet, sellers are putting up a strong fight to prevent a price climb above the immediate Fibonacci levels, causing a significant surge in volatility for the SOL price. At the moment, the SOL price stands at $189, marking an 2.8% increase from the previous day’s price.
Should there be a failure to surge beyond the resistance level at $200, the primary support line lies along the upward sloping trend line at $170. If this support is compromised, SOL’s price may drop to a critical support level at the EMA200 trend line on the 4-hour price chart. A robust recovery from the EMA200 trend line could send the price towards the 20-day Exponential Moving Average (EMA). Overcoming this hurdle could result in a trading range between $190 and $210 as the market stabilizes.
For the bulls to maintain their market dominance, it is crucial for them to push and sustain the price above $200. Success in this endeavor could see the price targeting the subsequent major resistance mark at $255.
