- Summary:
- Solana price has gone down by double digits barely a week after hitting record highs. However, key metrics signal potential strong recovery.
Solana price extended its decline on Thursday, trading at $235 at the time of writing after dropping 2.5% of its value on the daily chart. The crypto coin has lost 11% from its all-time high of $264 set five days ago, underlining the pressure from profit-taking.
Nonetheless, its upside potential remains stable, as it stays above key moving averages including the 20 and 50 Exponential Moving Average (EMA) levels. However, it has recently broken below the 10-EMA price of $238 on the daily chart.
Solana price decline attributed to profit-taking
Solana’s key on-chain metrics add credence to the view that SOL price decline is largely driven by profit taking, which could transition to a breakout and a bullish continuation. For instance, Coinalyze data shows that SOL’s Open Interest declined by 3.7% in the last 24 hours. That signals reduced investor confidence in Solana price action in the near-term. This could add downward pressure to the coin in the coming days.
However, the futures contracts value rose sharply by over 35% during that period, signaling bullish sentiment around SOL’s future price movement. That could provide support for Solana around the next key level of $230.
Elsewhere, Solana’s DeFi ecosystem performed relatively well in recent days. According to DeFiLlama, it Total Value Locked (TVL) grew by 3.4% and 9.4% in the last 24 hours and one week respectively to hit $8.94 billion. That signals increased use case for SOL, which could provide fuel for recovery.
Solana price prediction
The momentum on SOL price signals bearish trading below the $237 pivot level. Immediate support is likely to be at $234. However, extended bearishness could break below that level and test $232.
Conversely, moving above $237 will signal bullish control. In that case, watch out for the first resistance around $238. However, if the buyers extend their control, the price could breach that mark and invalidate the upside narrative. Also, the resulting momentum could push it to test $240.
