Solana price continued its strong downward trend and reached its lowest level since January 2024 as the crypto market crash intensified despite its strong fundamentals.
Summary
- The price of Solana has fallen to its lowest level in years.
- Third-party data shows it has strong fundamentals.
- It formed a giant head and shoulders pattern over several years on the weekly chart.
Solana (SOL) fell to $104, down sharply from its all-time high of nearly $300. This crash wiped out billions of dollars of value.
The drop is notable because it comes at a time when Solana’s fundamentals are improving. For example, data compiled by Nansen shows that his network is the most popular among investors.
Solana processed over 2.34 billion transactions in the last 30 days, an increase of 33%. Its transaction count was much higher than other networks like Ethereum, Base, and BNB Chain, combined.
Solana’s active addresses jumped 67% in January to more than 98 million. This growth means that it will cross the 100 million mark, which is higher than all other channels combined. Its inflow of stablecoins has also surged.
Solana also generates significant amounts of money in fees. It has earned over $26 million in the last 30 days, far more than the $14 million earned by Ethereum. BNB Chain earned $19 million during the same period.
More importantly, Solana ETFs are seeing increased demand from U.S. investors this year. Spot SOL ETFs added $104 million in inflows in January as Bitcoin, Ethereum and Solana shed assets.
Therefore, Solana’s price drop is mainly due to the continued performance of the industry as a whole. Bitcoin and most altcoins have all plunged in recent days, with the trend accelerating over the weekend.
Market participants are still considering the nomination of Kevin Warsh as the next chairman of the Federal Reserve and the rise in geopolitical tensions between the United States and Iran.
Technical analysis of Solana price
The weekly chart shows that Solana price has collapsed over the past few months. A closer look shows that it is forming a very bearish head and shoulders pattern, the neckline of which is at $109. It has now moved below the neck line, confirming the bearish outlook.
Solana price has moved below the 50-day and 100-day exponential moving averages and the Supertrend indicator. It also fell below the 61.8% Fibonacci retracement level, confirming the bearish outlook.
Therefore, the most likely scenario is where it continues to decline as sellers target the next key target at $70, which is the 78.6% Fibonacci retracement level.
