Despite strong on-chain fundamentals, SOL has seen a nearly 10% drop in a week, underperforming its layer 1 peers. This discrepancy between performance and fundamentals raises questions about SOL's ability to attract significant buying pressure.
Despite strong on-chain indicators for Solana, such as Total Value Locked (TVL) increasing by 2.67% and stablecoin growth of 500% month-over-month, SOL’s price has experienced a weekly decline of nearly 10%. This trend contrasts sharply with the performance of its main layer 1 competitors, placing Solana at the top of weekly losses among the five largest cryptocurrencies.
This SOL pullback can be attributed to aggressive selling pressure, with more than $4 billion in open interest liquidated over the past two weeks. Meanwhile, Ethereum has also experienced significant outflows but continues to outperform Solana. Indeed, the SOL/ETH ratio continues to decline, raising questions about a potential continued downturn for Solana relative to the broader market.
Although institutional players like DeFi Dev Corp. have significantly increased their exposure to SOL, this momentum hasn’t translated into performance equivalent to Ethereum’s. SOL/ETH has fallen by 25% over one month, its worst monthly performance since 2022.
With capital rotation heavily favoring Ethereum, SOL risks continuing to lag behind. Without a clear catalyst favoring risk-on assets, Solana may struggle to reclaim the psychological threshold of $200. Competition with other major digital assets, particularly Ethereum, remains a crucial challenge to monitor in a volatile and constantly evolving market.
From a technical perspective, if Solana manages to sustainably break through the $185 threshold, it could reach $230 in the coming weeks. Breaking the trendline at $174 is the first resistance to overcome. Indeed, the chart shows similarities with SOL’s price action on June 23, with an RSI approaching oversold territory on the 12H timeframe. Maintaining support above $154 will be crucial to confirm this rebound.
To take advantage of this approaching nearly 50% rebound, here’s how to buy Solana on Bitget :
Tip : Activate 2FA and plan your regular purchases to smooth out volatility.
Tip : Leverage increases the risk of liquidation. Test on a demo account and use moderate leverage (5x). Calculate the risk/reward ratio ($11 risk for $20 to $65 gain per Solana).
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
DISCLAIMER
This article is for informational purposes only and should not be considered as investment advice. Trading cryptocurrencies involves risks, and it is important not to invest more than you can afford to lose.
InvestX is not responsible for the quality of the products or services presented on this page and cannot be held liable, directly or indirectly, for any damage or loss caused by the use of any product or service featured in this article. Investments in crypto assets are inherently risky; readers should conduct their own research before taking any action and invest only within their financial means. This article does not constitute investment advice.
Risk Warning : Trading financial instruments and/or cryptocurrencies carries a high level of risk, including the possibility of losing all or part of your investment. It may not be suitable for all investors. Cryptocurrency prices are highly volatile and can be influenced by external factors such as financial, regulatory, or political events. Margin trading increases financial risks.
CFDs (Contracts for Difference) are complex instruments with a high risk of rapid capital loss due to leverage. Between 74% and 89% of retail investor accounts lose money when trading CFDs. You should assess whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Before engaging in financial or cryptocurrency trading, you must be fully informed about the associated risks and fees, carefully evaluate your investment objectives, level of experience, and risk tolerance, and seek professional advice if needed. InvestX.fr and the InvestX application may provide general market commentary, which does not constitute investment advice and should not be interpreted as such. Please consult an independent financial advisor for any investment-related questions. InvestX.fr disclaims any liability for errors, misinvestments, inaccuracies, or omissions and does not guarantee the accuracy or completeness of the information, texts, graphics, links, or other materials provided.
Some of the partners featured on this site may not be regulated in your country. It is your responsibility to verify the compliance of these services with local regulations before using them.
