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In a twist of fate, SOL, the native token of Solana, navigates through a period of volatility after a robust bullish run that spanned from September to December 2023. The once-surging token has encountered a steady decline over the past three weeks, leaving investors on the edge.
Solana Meteoric Rise Falters Amid Corrections
Initially hailed for its remarkable performance, SOL skyrocketed by an astonishing 500% since October 2023, with December alone contributing a remarkable 105% gain. The surge was largely attributed to the fear of missing out (FOMO) surrounding Solana’s SPL token airdrops, where tokens such as Jito (JTO), BONK, and Dogwifhat (WIF) played a significant role.
However, the currents have turned since the dawn of the new year. Recent weeks have witnessed a correction in SOL’s value, shaking investor confidence. Excessive optimism regarding airdrop expectations and delayed launches have contributed to this correction, as the boost to decentralized applications (dapps) proved short-lived.
Solana currently trading at $88.4036 on the daily chart: TradingView.com
The decline in SOL’s value has been evident, with the coin rarely surpassing the $107 mark in recent times. On January 19th, SOL faced a 9% decline, plunging to a low of $95. Analysts have observed a consistent rejection from the $100 level, further fueling investor caution.
At the time of writing, SOL was trading at $89.72, down 2.4% and 6.7%, respectively, in the last 24 hours and seven days, data from Coingecko shows.
Source: Defillama
SOL Faces Price Dip Amidst Growth
While SOL’s token price experiences a downward trend, there are positive signs of growth in other aspects. Solana’s total value locked (TVL) in SOL tokens reached an all-time high of 15.4 million on December 19th, 2023, indicating a substantial 60% growth compared to the previous month.
Furthermore, Solana has demonstrated an increase in network activity, particularly in transactions and volumes. Despite a slight decline in transactions and active dapp users over the past week, Solana’s dapps volume reached an impressive $594 million, with a staggering 72.3 million transactions.
Technical analysis paints a mixed picture for SOL’s future. While the token remains above its 50-day and 200-day exponential moving averages, suggesting a bullish sentiment, recent price action raises concerns of a potential reversal.
SOL’s relative strength index (RSI), on the other hand, sits at 43.70, indicating a bearish market, while the moving average convergence and divergence (MACD) stands at 55.50, pointing towards an upward trend.
Initially, analysts were optimistic, predicting a continued bullish run for SOL in 2024, with price projections ranging from $250 to $300. However, the general price dip observed since the beginning of the year, coupled with increased selling pressure, has shifted control towards the bears.
Top is in.
Will trade under $60 in 2024. pic.twitter.com/AHH7I8KZug
— Toni Ghinea (@ToniGhinea) January 19, 2024
A struggle between bulls and bears has ensnared investors. A lot of people are just going to sit tight and see what happens because of the resistance levels and the cautious market mentality.
It is worth mentioning that expert Toni Ghinea has predicted a possible decline to $60 by the end of 2024, which might intensify the negative sentiment around the SOL market.
Featured image from Shutterstock
