Solana (SOL) bulls have faced another round of liquidation following a broader market sell-off over the past two days. On its way south, SOL fell to $35 for the first time in over nine months. As altcoins enter a narrower period, the next few candles will be crucial to identify a breakout recovery on either side.
It has been a rough couple of weeks for SOL which has dealt with a number of new crypto assets as its market cap neighbors Terra (LUNA) and TerraUSD (UST) have dropped down the charts. However, at press time, the 8th largest cryptocurrency token by market capitalization is worth $56.7 after gaining 1.25% in the previous day but falling 20.5% in the past week, according to CoinCu data.
SOL daily chart
Among the top 10 coins, only Cardano (ADA) has seen a similar daily rally. With that said, Solana has come a long way from the rising star status it once held.
The SOL’s depreciation from the $80 resistance has given way to a pullback that has taken over 48.7% over the past week. With a massive amount of increased selling pressure, the altcoin fell between the limits of a falling wedge to a nine-month low on May 12.
If the bulls finally find their base and trigger a buy bounce, the SOL could topple the upper boundary of the current falling wedge, or in other words the current price zone which is the division between bulls and bears, price range 50-55$.
Indicators of SOL
Following the oversold stance of the Relative Strength Index (RSI), the SOL could revive if buyers just hold their ground. The index, at the time of writing, is trending slightly up after a bullish divergence over the past two days.
Regarding the Moving Average Convergence Divergence (MACD), it seems that the MACD line has crossed the Signal line and the Histogram range is also narrowing, signaling that the bulls are getting stronger. Similarly, the Chaikin Money Flow (CMF) indicator is trying to break out of its negative zone.
Solana’s TVL 60% off
Solana’s Total Value Locked (TVL) continued to plummet into the third week of May due to a market-wide bearish trend coupled with a gradual reduction in investor interest in decentralized finance (DeFi).
Specifically, this indicator has dropped from $11.22 billion on Jan 1 to $4.4 billion at the moment (May 17), down 60% year-to-date (YTD). Solana’s TVL hit a new low this week as decentralized applications (dApps) in its ecosystem fell to new lows.
Next time will still be motivated for SOL
A report by Messari Research really puts Solana under the microscope as it compares how the network performed in the first quarter of 2022 after peaking in the last quarter of 2021.
While citing “deteriorated network performance” as a factor behind Solana’s revenue, the report stated:
“While market cap and revenue declined by 30% and 43.5%, respectively, the network experienced continued uptrends in usage, quantified by average active unique fee payers (+28.4%), average transactions per second (+94.8%), and total average daily transactions (+4.2%).”
Solana is a decentralized blockchain that allows building highly scalable and user-friendly applications. As the fastest growing ecosystem in the crypto-finance space, Solana has thousands of projects under Web3, NFT and DeFi.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Harold
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