Solana Price Drops Amid Market Uncertainty
Solana (SOL) is trading lower at around $185 on Tuesday. This follows a high of $194 the previous day. The drop reflects cautious sentiment in the wider cryptocurrency market. Investors remain cautious due to economic uncertainty and lack of strong price drivers.
On-Chain Activity and Market Interest Decline
Solana’s network shows fewer active addresses. Data from DefiLlama reveals an average of 15 million active addresses for the week ending October 19. This is down 19% from 33.63 million recorded in late May.
So far this week, 4.74 million addresses have sent or received digital assets on Solana. A continued drop in active addresses could pressure SOL’s price. Lower activity means fewer transactions and less network revenue.
Solana’s strength lies in DeFi and meme coins. Reduced on-chain activity may hurt developer confidence. This could slow liquidity inflows and the launch of new decentralized apps (dApps).
The futures market also shows less interest. Open Interest (OI) fell to $8.64 billion from a peak of $15 billion in October. OI measures the total value of open futures contracts. A decline signals weaker investor interest.
The OI weighted funding rate dropped to -0.0001%, indicating more traders are taking short positions. However, this is not extreme compared to October’s low of -0.3753%, when the market faced a major deleveraging event.
Technical Analysis: Bears Maintain Control
Solana is trading below its 200-day Exponential Moving Average (EMA), near $186. This suggests the price may continue to fall. The Moving Average Convergence Divergence (MACD) indicator shows a sell signal, encouraging risk reduction.
If Solana closes below the 200-day EMA, it could drop 6% to test support at $174. On the other hand, a rebound above the EMA is possible if market sentiment improves. Traders would then watch for a MACD buy signal.
Key resistance levels are $190 and $200. Breaking above these could signal a stronger recovery for SOL.
