Solana Challenges $100 Amid Bearish On-Chain Pressure!

Solana’s price is experiencing a surge in buying interest, following a strong rebound from a critical support level that has restored investor confidence by holding above the $100 mark. This upward movement followed Bitcoin’s surge past $43,300, which initiated a wave of short liquidations across the market. Despite this positive momentum, current on-chain data suggests that Solana’s rally to $100 could be temporary, as key indicators signal a rising bearish trend.

Demand For Solana Declines Heavily

Over the last 24 hours, the total liquidation for the crypto market surpassed $106 million, where sellers liquidated over $95 million worth of positions. Notably, Solana witnessed a short-liquidation of nearly $6.5 million.

The recent uptick in Solana’s price was initially triggered by a collective sigh of relief from holders following a significant network outage that temporarily left the blockchain non-functional. Remarkably, the network had managed to operate nearly a year without experiencing any major disruptions.

Despite its bullish comeback, there are potential risks that could halt Solana’s upward trajectory, as on-chain indicators begin to show bearish trends. Recent on-chain data reveals a notable decrease in demand for Solana, with the number of active addresses plummeting from 1.02 million to a recent low of 801,000, indicating reduced activity among holders.

Furthermore, Solana has experienced a significant decline in transaction fees, dropping from $1.21 million to $581,000. This decrease in total fees could shake buyers’ momentum, potentially allowing sellers to put greater influence over the price.

As a result, this could serve as a catalyst for a correction in the price of SOL. Presently, the long/short ratio for Solana has been on a downward trajectory, falling below 1 to its current level of 0.7334. This indicates an increasing bearish sentiment, with approximately 58% of positions betting against a price surge.

What’s Next For SOL Price?

The bulls are dominating the price chart now, with buyers attempting to break above the resistance channel in the coming hours. However, sellers are strongly defending a surge above immediate Fib channels, resulting in an intense momentum for SOL price. As of writing, SOL price trades at $104.7, surging over 8.5% from yesterday’s rate. 

If the price fails to surge above the resistance line, the first level of support is at the ascending downtrend line. Should this level be breached, the SOL price could potentially decline to the significant support level at $80. A strong rebound from $80 could send the price back to the 20-day EMA. Surpassing this barrier might lead to a period of consolidation within the $107 to $80 range.

For the bulls to hold control, they must successfully push and maintain the price above $110. Following this, the price may aim for the next key resistance level at $116.