Solana's native token, SOL, has faced a significant price decline, currently trading around $147. Over the past day, traders experienced $15 million in liquidations, as SOL continues to consolidate between $162 and $125, a range where buying and selling pressures have been battling since April.
The lack of strong upward momentum for Solana can be attributed to reduced market activity following a crash in earlyAugust. Despite a swift recovery above $125, futures and perpetual open interest have decreased sharply this month, dropping from $2.47 billion to $1.7 billion, a decline of 32%. Solana's aggregated spot volumes have also shown a decline, falling from $74 billion on August 5 to just $7.5 billion recently, suggesting a lack of urgency among traders.
Despite the current volatility, some analysts remain optimistic about Solana's potential. Matthew Dixon, CEO of Evai.io, noted that SOL could be poised for a significant upward movement, targeting a price of at least $194. He based this prediction on the Elliott Wave Theory, suggesting that SOL has completed a clear five-wave upward movement and could see further gains if it breaks above the critical $150 level on the daily chart.
Solana has been consolidating between $162 and $127 for a significant portion of the past few months, with the $150 level serving as a crucial pivot point. Historical data shows that every time SOL has breached this level with urgency, it has successfully rallied above $162. However, the recent failure to maintain momentum above $150 raises concerns about its ability to break out of this range.
The broader crypto market is experiencing a correction, with SOL underperforming compared to other cryptocurrencies, particularly Ethereum (ETH). The SOL/ETH trading pair has dropped significantly, reflecting a shift in investor interest towards ETH, especially with the anticipation of regulatory approvals for Ether exchange-traded funds (ETFs) in the U.S. This shift has impacted Solana's market dominance, which has decreased from 3.30% to 2.82% since May.
As SOL navigates through this period of volatility, its ability to maintain above the $150 mark will be crucial for any potential recovery. Investors and traders are closely monitoring market indicators and technical signals to gauge Solana's next moves. The outcome of this consolidation phase will likely determine whether SOL can regain upward momentum or continue to face downward pressure in the coming weeks.
