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The cryptocurrency market is currently experiencing a broad correction, with declining volumes impacting several digital assets, including Solana. As Bitcoin's price drops below the critical $58,000 support level, the pressure on altcoins like Solana is increasing. Solana’s price has recently fallen below the $130 mark, raising questions about whether it might drop further under $110.
Solana's Recent Downtrend
In the latest market correction phase, Solana has seen a significant decline, forming eight consecutive bearish candles and losing 20% of its value. As of today, Solana's price is down by 0.39%, potentially creating a ninth consecutive bearish candle. On the 4-hour chart, the ongoing downtrend has led to the formation of a resistance trend line. Despite this, a recent lower-low formation has shown a bullish divergence in the 4-hour Relative Strength Index (RSI) line, which could indicate a possible bull cycle challenging the overhead trend line. However, the increasing bearish influence has resulted in a death cross between the 50 and 200 Exponential Moving Averages (EMAs) on the 4-hour chart, signaling potential continued pressure.
Declining On-Chain and DEX Volumes
The Solana network is currently feeling the effects of the broader market downturn, with significant declines in on-chain volumes. As market participants move away from the on-chain ecosystem, Solana's volume has dropped to historically low levels. Experts have noted that the network's on-chain volumes were previously higher when Solana's price was under $20 compared to current figures.
Data from DeFiLlama indicates that the volume of decentralized exchanges (DEXs) on the Solana network has decreased by 19% over the past week, now standing at $539 million. This decline is part of a larger trend observed since early March 2024, where daily DEX volume on Solana has plummeted by over $3 billion, dropping from $3.8 billion to $539 million—a decrease of more than 87%. Additionally, the total on-chain volume has reduced to $6 billion over the same period, highlighting ongoing challenges for the network.
Future Price Levels for Solana
Analyzing Solana's price movement through Fibonacci retracement levels from the early August correction phase, the next key level appears to be the 23.60% retracement at $125. Further down, the next support levels are identified at $115 and a base level at $110. Conversely, if Solana manages to reverse its current trend and begin a new bull cycle, resistance levels could emerge at the 38.20% and 50% Fibonacci levels, around $136 and $145, respectively. Additionally, the declining 50 EMA could serve as a dynamic resistance, potentially impacting Solana's upward movement.
