Solana (SOL) sees a 10% decline due to reduced market activity and low liquidity, despite a recent recovery. Analysts predict a potential upside if key levels are breached.
Solana (SOL) experienced a 10% drop over the weekend, struggling to maintain momentum above key psychological levels. Despite a swift recovery earlier this month, the altcoin’s recent price action has been marked by caution and declining market activity. As traders grapple with low liquidity and reduced open interest, Solana’s future trajectory remains uncertain, but some analysts see potential for a bullish turn.
Key Points:
Significant Weekend Decline: Solana registered a 10% drop over the weekend, failing to close above the crucial $150 level. This decline followed a period of consolidation between $162 and $125, where buyers and sellers have been in a tug-of-war since April.
Decline in Market Activity: Since its early August crash, Solana’s market activity has significantly diminished. Open interest (OI) in futures and perpetual contracts dropped by 32%, from $2.47 billion to $1.7 billion, indicating a cautious sentiment among traders despite a 25% recovery.
Low Spot Volumes: Solana’s spot trading volumes have also seen a sharp decline. After reaching $74 billion in trading volumes on August 5, current volumes have dropped to $7.5 billion. This lack of trading activity contributed to the recent price drop, as minimal liquidity played a role in the altcoin’s 10% decline.
Technical Analysis and Future Predictions: Despite recent setbacks, some analysts believe Solana could be poised for a breakout. Analyst Matthew Dixon suggested that SOL could see a surge above $190, citing a clear wave pattern in its recent price action. However, breaking and sustaining levels above $150 remains crucial for any upward movement.
Solana’s recent 10% decline underscores the challenges it faces in maintaining upward momentum amid low liquidity and cautious market sentiment. While the altcoin has shown signs of recovery, the lack of significant market activity continues to weigh on its price. However, with key levels in sight, Solana could still see a bullish turn if market conditions improve and trading volumes pick up.
Source: Cointelegraph
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