Solana has been experiencing a downward trend in its price over the past few weeks, reflecting the overall performance of the global crypto market. In the month to date, the price of SOL has dropped by nearly 18%, and it is down 6% for the week. The total market cap of Solana has also decreased by more than 5% in the last day, bringing it to a value of $8 billion. As a result of this decline, Solana is currently ranked 9th in the crypto market. However, the total volume of SOL traded has increased by 35% over the same period.
The drop in Solana’s price can be attributed to various factors impacting the cryptocurrency market as a whole. Other major cryptocurrencies like Bitcoin and Ethereum have also witnessed losses of more than 4% in the last day, trading at $25,980 and $1,643, respectively.
The crypto market experienced a brief rally earlier this week following Grayscale’s court win against the US Securities and Exchange Commission (SEC). The US Court of Appeals ruled that the SEC was wrong in denying Grayscale permission to convert its popular Bitcoin trust to an ETF. This news had a positive impact on the cryptocurrency market, including Solana. However, the rally was short-lived, and the market is still cautious due to the SEC’s ongoing crackdown on the crypto industry. The SEC recently filed a sealed motion in its case against Binance, which has raised concerns among investors and market participants.
In addition to regulatory concerns, investors are closely monitoring key economic data, including the nonfarm payrolls data, for insights into the economic outlook and the Federal Reserve’s monetary policy path. The core personal consumption expenditures (PCE) index rose 4.2% in July according to data from the Bureau of Economic Analysis, matching market expectations. This increase in consumer spending raises the likelihood of the Federal Reserve raising interest rates further this year.
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From a technical analysis standpoint, Solana’s price has failed to initiate a new bullish trend above the important level of $22 in recent days. As a result, the price has dropped by almost 18% in the last 30 days. The bulls briefly gained control on Tuesday, leading to a 6% increase in SOL’s value before retreating. Currently, Solana has formed a bearish triangle on the daily chart, indicating a continuation of the bearish trajectory.
Moreover, Solana remains below key moving averages, including the 50-day and 200-day exponential moving averages, as well as the 50-day and 100-day simple moving averages. The Relative Strength Index (RSI) is also below the signal line, indicating increased selling pressure. Additionally, the Moving Average Convergence Divergence (MACD) indicator is signaling a sell signal.
Based on these technical indicators, it is likely that Solana’s price will continue to decline, with bears gaining full control of the market and increasing selling pressure. If this trend continues, the next support levels to monitor will be $19 and $17.70. However, there is a possibility of a reversal above the major hurdle at $22, which would invalidate the bearish thesis.
In conclusion, the recent decline in Solana’s price is in line with the overall performance of the global crypto market. Regulatory concerns, economic data, and technical indicators all contribute to the current downward trend. Although there was a brief rally earlier this week, the market remains cautious due to ongoing regulatory actions and economic uncertainties. Investors and market participants will continue to monitor developments closely to make informed decisions about Solana and other cryptocurrencies.
