Solana Active Address Drop Could SOL Price Be on the Brink of a Devastating Plunge
Over the past 48 hours, the cryptocurrency market has been extremely volatile, leading to unstable conditions for both Bitcoin and altcoins. One altcoin in particular, Solana, has been heavily impacted by this volatility, resulting in notable liquidations. As a result, there has been a fierce battle between buyers and sellers. At the same time, various on-chain metrics for Solana have taken a bearish stance, indicating an advantage for the bears.
Solana’s active address count has seen a significant decline. In the past day, the price of Solana (SOL) has experienced significant fluctuations around the $140 level. According to Coinglass, the total liquidations for Solana have exceeded $21 million, with long positions contributing $15 million to this total. Additionally, Solana’s trading volume has seen a massive 90% increase, reaching $3.5 billion, signaling a significant rise in trading activity within just one day.
Despite this volatility, on-chain indicators have been showing bearish trends. Data from on-chain analysis reveals a downward trend in the number of active addresses for Solana. This metric has dropped from a weekly high of 1.59 million to a recent low of 1.44 million, a decline triggered by the recent market crash. If the count of active addresses continues to decrease, it could lead to a sharp fall in the price chart in the coming days. Furthermore, the value moved on-chain has also declined by billions in recent weeks.
A potential catalyst for Solana’s value could be the approval of a spot Ethereum exchange-traded fund (ETF), which is expected to happen as early as this week. If approved, it is anticipated that billions of dollars will flow into these funds, similar to what happened with Bitcoin earlier this year. Analysts suggest that following this event, the U.S. Securities and Exchange Commission (SEC) may shift its focus to spot Solana ETFs. VanEck has already submitted its application for a Solana ETF, and it is expected that other firms such as Blackrock, Franklin Templeton, and Ark Invest will soon seek approval for their own Solana funds.
Looking at the future of Solana’s price, it is currently forming a bearish descending triangle pattern. This pattern will be confirmed if the price breaks and closes below the $118 level. However, bulls are strongly defending a decline below the immediate Fibonacci channels. As of writing, the price of SOL is trading at $137, a decline of over 0.7% in the last 24 hours.
On a positive note for the bulls, the Relative Strength Index (RSI) indicates a potential positive divergence, suggesting that selling pressure may be decreasing. If the bulls manage to drive the price above the 20-day Exponential Moving Average (EMA), the SOL/USDT pair could rally towards the 50-day Simple Moving Average (SMA) at $153 and then approach the downtrend line.
A break above the downtrend line could send the price towards a retest of $188. Conversely, if the price declines from the 20-day EMA and falls below $118, it will confirm the bearish pattern. In that case, the pair might drop to $80.
The strong recovery from the $121 level shows that bulls are actively defending the $118 support level. If the price rebounds from its current position and climbs above $150, we may see a surge in buying demand.