Will Sellers Defend SOL Price?

The cryptocurrency market has rebounded from concerns about a possible $9.4 billion BTC sale by Mt Gox, leading to a bullish momentum for various altcoins in the past day. The price of SOL has sparked buying interest, surpassing $140. Despite this rise, the gains may be temporary, as on-chain metrics and network activity for SOL indicate potential bearish trends.

Solana’s Address Stat Faces A Decline

Solana’s recent gains come amid a decrease in Bitcoin’s dominance in the crypto market, suggesting that traders are shifting their investments from BTC to leading altcoins. The Bitcoin Dominance Index saw a sharp drop of over 1.8% on June 25, marking its most significant daily decline since January.

According to data from Coinglass, the SOL price experienced a total liquidation of approximately $3.7 million, with contributions from traders on both sides. The data indicates that long-position holders accounted for about $1.7 million of this liquidation, while sellers liquidated positions worth $2 million.

The latest on-chain metrics for SOL suggest a downward trend. Over the past five days, there has been a noticeable decline in Solana’s active addresses, falling from a high of 1.62 million to a low of 1.5 million. This reduction in user activity, likely influenced by recent market volatility, has led to a weaker trading sentiment and low chances for a major price movement.  

Additionally, Solana faced a drop in its new addresses as it declined from the high of 1.06 million to 920K. This suggests fewer people are joining the network, which could indicate a declining interest in trading on the platform. A reduction in new users can lead to less activity and might decrease the overall market engagement with Solana.

However, there’s bullish news as DeFiLlama reveals a rise in the total value locked (TVL) for Solana’s network, reaching $4.2 billion as of June 26. This increase shows that more people and developers are getting involved and trusting the Solana ecosystem, which has helped boost its price.

What’s Next For SOL Price?

Solana has bounced back impressively from $122 and re-entered its descending channel pattern. Bulls are currently breaking above immediate Fib channels and are holding the price above the EMA20 trend line. As of writing, SOL price trades at $138, declining over 0.8% in the last 24 hours.

Bears might attempt to stop this recovery rally at the 100-day EMA ($141). If the price sharply reverses from this level, the SOL/USDT pair could drop to the critical support at $122 again. Bulls are likely to protect this level because if it breaks, the price could fall further to $100.

On the other hand, if the bulls manage to drive the price above the 100-day EMA, it would indicate that the selling pressure is easing. This could lead the pair to rise towards the resistance line of $159. Breaking above this level could consolidate the price within $175-$192.