Solana’s price has experienced a recent loss of momentum, primarily due to several rejections faced by Bitcoin and a declining interest from whale investors in the altcoin. Consequently, SOL’s price struggled to breach resistance levels, and a decline in on-chain metrics has become evident. This includes a notable drop in transaction fees, due to reduced buying demand, and a decrease in the number of active addresses.
A Massive Decline In Solana’s Total Fees
In the past 24 hours, both bullish and bearish traders have been actively liquidating their assets as the Solana price experienced a total liquidation amounting to $6.4 million. Among these liquidations, bullish traders sold off approximately $2.3 million worth of their positions, while sellers closed out short positions totalling $4.1 million.
Recently, there has been a noticeable decline in Solana’s transaction fees, signaling a consistent downward trend that commenced around December 27th. The data reveals a massive decrease in fees, declining from a high of $763,000 to a low of just $122,000. This reduction in fees is closely correlated with a decline in the daily active addresses on the Solana network, which have decreased by over 52% in the span of a week. This drop indicates a reduced level of network activity.
Although Solana has gained a reputation for its comparatively lower transaction fees in contrast to Ethereum, a rise in these fees signifies an increased level of activity on the Solana network. This upward trend implies that the network is currently witnessing a surge in usage and transaction volumes.
The recent decrease in Solana’s overall fees indicates a reduction in user activity, potentially creating increased confidence among sellers. This newfound confidence may lead them to attempt to drive the price below the support levels in the coming hours.
What’s Next For SOL Price?
Recently, Solana’s value has seen a recovery, moving up from its moving averages, indicating a robust interest from buyers. Despite this, SOL is encountering resistance while trying to surpass its current consolidation range. At the moment, the price of SOL is $99.1, showing an increase of 2% from the previous day’s value.
The 20-day Exponential Moving Average (EMA) is holding steady at about $97, while the Relative Strength Index (RSI) is balanced near 53, suggesting a balance between supply and demand. As the price faces rejection near the resistance line at $103, it suggests a rising selling pressure near higher levels. If sellers continue to defend this level, we might see a drop toward the channel’s support line at $90.
Conversely, if the price rises above the resistance line, it could indicate buyers taking advantage of the dip. This scenario could push the price to break through the crucial resistance of $125. However, for a sustained upward trend, buyers must hold the price above this resistance level.
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