on Friday, June 14 solana (SOL) price dropped to a 30-day low of $139. On-chain analysis explores some key metrics that could trigger SOL’s recovery phase.
Further Decline Following US Fed Rate Decision
Ethereum ETF Projects like Solana (SOL), Avalanche (AVAX), and Cardano (ADA) have struggled for traction since its approval in late May drew investors’ attention from other layer-1 projects.
Despite efforts by Solana validators to reduce selling pressure, the SOL price fell further this week after the US Federal Reserve’s interest rate pause decision dashed investors’ hopes for a rate cut in the first half of 2024.
As seen above, SOL price dropped to $139 on June 14, its lowest level since May 13, 2024. This highlights how Solana has struggled since Ethereum ETFs were approved by the SEC.
In early June, Solana node validators began depositing more SOL coins in an attempt to generate passive income and reduce selling pressure amid the market downtrend. However, the US Fed’s hawkish interest rate decision this week negatively affected the SOL’s recovery hopes.
Solana Price Projection
Solana price has fallen below the critical psychological support level of $140, but recent trends observed among speculative traders suggest that the bottom of the SOL market may be near.
Solana traders, who have been down for 30 days, are now making strategic moves to anticipate the market bottom.
Coinglass’ Liquidation map compares the value of SOL LONG contracts to active SHORT contracts listed on various derivatives trading platforms.
As shown below, SOL Long traders placed $120 million worth of active contracts around current prices in an attempt to make huge profits when spot prices begin to rise again.
In comparison, total active Short contracts currently stands at approximately $109 million. This shows that LONG contracts exceed SHORT contracts by over $10 million, indicating that the bulls are moving to take control in the next market phase.
In terms of short-term support and resistance levels, the bulls are likely to face a strong sell wall near the $150 region. The chart depicting this situation reveals that over $96 million in active short positions were placed at the $150.54 level.
To avoid big losses, many of these traders may make big sales and slow down the recovery by activating stop-loss orders as the SOL price approaches the $150 level.
However, if the bulls can avoid this hurdle, the resulting short squeeze could lead the recovery phase towards the $170 level.
On the other hand, in case of a prolonged correction phase, altcoin bulls can count on the $130 level as the next major support level.
Source : The Crypto Basic
