Solana finds itself amidst a phase of ongoing bearish activity, largely due to the significant downturn in the overall cryptocurrency market, with its valuation dropping nearly 23% over the last week. Following this sharp decline witnessed in recent days, the altcoin appears poised for a potential price rebound as encouraging trends emerge on SOL’s chart.
Gaussian Channel Formation Offers Firm Support For Solana
Hope is rekindled as Solana exhibits prospects for an upward momentum following a period of heightened volatility. Cryptocurrency analyst and investor Trader Tardigrade discerns a positive trend on SOL’s chart, with a bullish formation providing substantial support for its price.
SOL, which has faced considerable selling pressure, is now trading near critical technical levels that could alter its price direction. Trader Tardigrade pointed out that SOL has established a Gaussian Channel formation on the weekly timeframe, indicating an increase in momentum.
It is important to highlight that the midpoint of the Gaussian Channel structure is providing support for Solana. At this juncture, the crypto analyst noted that the altcoin’s downward movement is anticipated to decelerate or experience a price reversal.
Nonetheless, Solana’s ability to breach significant resistance levels and ascend again will also rely on ongoing momentum and robust buying interest. Meanwhile, certain factors like meme coins exhaustion and the considerable $1.7 billion SOL token unlock this weekend pose significant bearish pressure on the asset.
While these developments may suggest looming bearish pressure, Trader Tardigrade maintains a positive outlook on SOL’s long-term prospects. The expert’s optimistic viewpoint is supported by the ongoing growth of the Solana ecosystem and its recovery from previous supply issues.
In light of the current volatility in SOL’s value, on-chain indicators indicate that investors appear to be experiencing a sense of fear. This change in investor sentiment is reflected in a significant decline in major SOL investors, who are typically referred to as whale holders.
Experienced technical analyst and trader Ali Martinez reported a decrease in wallet addresses possessing more than 10,000 SOL over the past month. The downturn raises concerns regarding whether these significant investors are repositioning or realizing profits as they await possible price recoveries. Such weak investor sentiment places SOL’s price at risk of experiencing further downward movement towards lower levels.
SOL Transaction Volume Experiences Notable Decline
Diminishing confidence and interest among investors are further reflected by a sharp drop in SOL transaction volume, signaling diminished network activity. A decline in transaction volume suggests a lower demand for transactions on the Solana blockchain.
Data from Ali Martinez indicates that SOL transaction volume has plummeted from an astounding $1.99 billion to a mere $14.57 million. This drastic decline occurred over the span of three months, especially since November of the previous year. As the altcoin maintains crucial support levels, this situation raises questions about the sustainability of its position above these thresholds.
Featured image from Adobe Stock, chart from Tradingview.com
