Solana Dips to 45-Day Low: Will SOL Rebound at $130?
3 min read
Solana Dips to 45-Day Low: Will SOL Rebound at $130?
After a brief uptick to $151 on June 16, Solana’s native token, SOL, has experienced a sharp 24% correction from its price on June 7. This drop has been steeper than the overall crypto market’s 14% decline in the same period, suggesting that SOL is facing more severe problems than the broader market’s waning interest in cryptocurrencies. Several indicators, such as the Solana Network’s on-chain activity and the demand for leveraged positions, point to a continued bearish trend for SOL. If demand doesn’t pick up, applying further downward pressure, the token could retest the $130 level or even dip lower.
One reason for the declining interest in cryptocurrencies, including SOL, is the robust performance of the S&P 500 index, which hit an all-time high on June 17. The stock market, driven by tech stocks and positive employment and consumer data, has inspired confidence in second-quarter earnings reports. Investors are pricing in the likelihood of the U.S. central bank cutting interest rates by September. Despite the higher potential returns in the crypto market, concerns about the U.S. economy’s sustainability, given the high interest rates, loom large. This risk is particularly burdensome for altcoins like SOL, as Bitcoin and Ether have preferential access to institutional money through exchange-traded funds (ETFs).
Even if the crypto market sees a revival in the coming months, competition among smart contract blockchains will be intense. Numerous applications on the Solana Network provide asset bridges to other blockchains that compete through yields, liquidity, airdrops, and token launches. Solana’s native staking reward rate is only 1.3% above the SOL token inflation rate. In contrast, Ethereum boasts a 2.8% effective reward rate due to its burn mechanism, which results in just 0.4% annualized inflation. This competitive edge of Ethereum impacts Solana’s total value locked (TVL), which has remained below $30 million since May.
Arthur Hayes, BitMEX co-founder and former CEO, has predicted that Solana might not remain a top-level decentralized application (DApp) network over the next one to three years. According to Hayes, Aptos is a potential candidate for leadership, although detailed reasons for this choice were not provided. Aptos’s modular approach to transaction processing, which involves grouping transactions into batches and using a sharded architecture, is a notable feature setting it apart.
Solana is also under increased strain from Ethereum’s layer-2 ecosystem, where the TVL remains above $40 billion. Platforms like Arbitrum, Base, and Optimism have already outperformed the Solana Network in terms of DApp activity. For instance, Solana’s weekly volume of $589 million pales in comparison to BNB Chain’s $4.9 billion and Arbitrum’s $9.5 billion within the same timeframe. Solana’s decentralized finance TVL stands at $1.2 billion, which, while higher than its competitors Aptos and Avalanche, is still much lower than BNB Chain’s $4.9 billion.
To gauge market sentiment more accurately, traders should monitor the derivatives markets. Perpetual contracts, or inverse swaps, include an embedded rate recalculated every eight hours. A positive rate suggests a preference for higher leverage by buyers. The funding rate for SOL perpetual futures has hovered below 0.01% every eight hours for the past week, equating to 0.2% per week, indicative of a neutral market. The last instance of notable excitement was on June 6, when the leverage long’s cost reached 0.5% per week.
Analyzing Solana Network’s activity by DApp deposits, volumes, and the muted interest from SOL derivatives traders, it appears the likelihood of SOL breaking below the $130 support level in the near term is considerable. The network’s struggle to attract more DApp activity and the competitive pressure from other blockchains suggest that SOL’s bearish trend may persist, urging investors to exercise caution.
Arthur Hayes may be right after all. Solana might not survive the coming years if this bearish trend continues 📉. Aptos seems like a safer bet.”
I was optimistic about Solana before, but this 24% drop is a huge red flag . Time to reconsider my investment strategy .
Despite the recent dip, I still believe in Solana’s long-term potential. This is just a bump in the road!
SOL is facing challenges, but this is when true believers hold strong. Excited for the future!
It’s hard to stay optimistic when SOL keeps underperforming like this . Investors beware.
Market corrections happen. Solana’s sharp decline is a test of resilience. The community will come out stronger!
Oh no, SOL! Your performance recently has been abysmal! What’s going on?!
SOLs recent drop is making me lose confidence . It’s really not shaping up to be a good investment anymore.
SOL may be down, but innovation and technology will always push it forward. Excited to see where it goes next!
Ethereum and other blockchains are eating Solana’s lunch . Time to jump ship?
Investing in crypto requires patience. Solana may be struggling now, but it’s shown potential before and can do it again! 🚀
The volatility of the crypto market is always challenging. However, I see SOL’s potential and am staying optimistic! 🌞
Understanding market dynamics is key. Solana’s current state offers insights for future strategies. Stay sharp!
From $151 to potentially below $130? That’s just too much volatility 😱. Solana better pull through soon.”
The numbers may seem daunting, but Solana’s potential can’t be ignored. Here’s to brighter days ahead!
Great insights into Solana’s current state. Even with dips, I’m optimistic about its future. Here’s to better days ahead!
📉 Crypto market volatility is nothing new. I’m keeping an eye on Solana for when it rebounds! 💪
Sorry Solana, but I think I’m moving on to blockchains with more stable prospects . This trend is scary.
Even with current setbacks, Solana’s innovative spirit remains unmatched. Looking forward to its comeback! 🚀
Solana has a history of bouncing back stronger. Let’s see what the upcoming months have in store for SOL!
I can’t believe how poorly Solana is performing in comparison to the rest of the market . Pretty disappointing.
This dip is temporary. Solana’s tech advancements and community support will shine through. Watch this space!
Even with the potential for higher returns, SOL is just too risky with these constant fluctuations .
The competitive pressure is intense, but Solana’s community is strong. Keep building and innovating! 💡
Solana might be facing some challenges, but let’s not forget the innovation within its network. Excited to see how it evolves!
With Ethereum boasting better staking rewards, why would anyone stick with SOL? Not me.
SOL has had its highs and lows, but the tech behind it is solid. Looking forward to seeing its resilience!
The decreasing on-chain activity and lack of interest from derivatives traders are bad signs 🕳️. Solana needs a miracle.”
The competition is just too strong for SOL 😔. Even the TVL numbers are disappointing compared to others.”
Markets ebb and flow. Solana’s dip is a chance to learn and possibly invest wisely. Seize the opportunity!
The competitive landscape is fierce, but Solana’s unique features will help it carve out its space. Rooting for SOL!
Even with a dip, Solana’s innovative approach stands out. The market will turn in its favor soon!
In crypto, patience is a virtue. Solana’s decline today might be tomorrow’s opportunity. Stay hopeful! 🌟
Reading about Solana’s blockchain and the challenges ahead makes me appreciate the complexities of crypto investments. Stay informed!
These ongoing issues with Solana are worrying . Who wants to invest in something so unstable?
Solana’s community and tech innovations are reasons enough to stay positive. Every dip is a setup for a higher bounce! 🔥
Every crypto has its ups and downs. Solana’s challenges are part of the journey. Keep believing!
Meh, seeing SOL dip lower than the overall market just corroborates my fears about its stability . Not looking good.
It’s tough to see SOL down, but we know the market can turn around quickly. Hang in there, everyone!