In recent times, Solana (SOL) has gained significant attention as its price has steadily rebounded from recent lows. This upward momentum followed Bitcoin’s surge toward the $40,000 level. However, amid this bullish sentiment, there has been a decline in Solana’s on-chain metrics. This decline is seen by a noticeable decrease in transaction fees, triggered by decreasing buying demand near resistance levels, as well as a decline in the number of active addresses.
SOL’s On-chain Volume Drops By Billions At this moment, the market is witnessing a robust struggle between buyers and sellers, both aiming to establish a clear price trend for SOL, which currently resides within a range bound zone. This intense competition has led to substantial liquidation events on both sides.
According to recent data from Coinglass, Solana has encountered total liquidations approaching the $5.2 million mark. Out of this sum, buyers have struggled with liquidations totaling roughly $2.5 million, while sellers have liquidated positions amounting to approximately $2.7 million.
In recent times, Solana has experienced a steep drop in its transaction fees, indicating a sudden downtrend. The data shows a substantial fee decrease, plummeting from a peak of $539,000 to just $128,000. This decline in fees closely follows a reduction in the daily active addresses on the Solana network, which have decreased by more than 26% within a month. This decline signifies a low level of network activity. Additionally, Solana’s on-chain volume has dropped by billions as it declined from $47 billion to $30 billion.
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The recent drop in Solana’s overall transaction fees suggests a decrease in user activity, which could boost the confidence of sellers. This increased confidence might prompt them to make efforts to reverse the price near resistance levels in the hours ahead.
Recently, Solana has shown a recovery in its value, moving above its 20-day EMA trend line, which signifies robust interest from buyers. However, SOL is facing resistance as it attempts to break out of its current consolidation range. Currently, SOL is trading at $86.5, marking a 0.2% increase from the previous day’s value.
The 20-day Exponential Moving Average (EMA) remains stable at approximately $87, and the Relative Strength Index (RSI) hovers around 47, indicating a balance between supply and demand. The price encountering rejection near the $90 resistance line suggests increasing selling pressure which is defending a breakout momentum above the resistance channel. Should sellers succeed in defending this level, we may observe a decline toward the support line at $79 within the channel.
On the other hand, if the price manages to surpass the resistance line, it could indicate buyers capitalizing on the dip. In such a scenario, there could be potential for a breakout above the critical $116 resistance. However, to sustain an upward trend, buyers must maintain the price above $125.
Shayan Chowdhury Shayan is a digital nomad and a professional journalist. He delivers high-quality engaging articles to Coinpedia through his in-depth research and analysis.