Solana blockchain has landed in a narrow consolidation zone with prices failing to breach important resistance levels based on its price action. In the current crypto market, real-life use cases of smart contracts are increasing in DeFi and dApps, with the majority using ETH’s smart contracts. While Ethereum has widely advertised its plans to shift toward Proof of Stake and increase its tractions speeds with lower gas fees, it’s far-fetched and might get delayed as the project is quite behind its scheduled roadmap.
SOL comes in at the right spot to take the dominance of ETH from Smart Contracts and dApps. The cost of one transaction at Solana costs significantly less than Ethereum. Without any significant developments to reduce its transaction fees, ETH may lag behind its competitors.
Solana not being alone in this race against time is another factor pushing the developers to introduce new developments at a faster rate. Despite its huge price decline, SOL is trading at a premium from the June 2022 lows. Market capitalization remains above $12,337,794,039, with supply circulation of just 67% SOL token.
SOL/USD fails miserably to consolidate above the immediate resistance. It indicates a fundamental lack in uptrend sentiment, forcing buyers to resort to profit booking and exit the token rather than holding for a higher gain. The double-digit decline on July 25 will take a higher toll on the further price movement of SOL. Read more about the future price actions of the SOL token here!
On a single glance, the Solana price action resembles a wave pattern, with each swing hitting a higher high and higher low. This price action indicates the lack of buying strength with each peak resulting in profit booking taking charge. With this perspective, Solana (SOL) should trade towards a higher high above $47.5.
The RSI indicator signifies a significant decline in buying strength that was caused by the price decline. The MACD indicator has already marked a bearish crossover pattern with the first negative axis histogram on May 20, 2022. It could result in a shocking price decline if the sentiment doesn’t reverse soon. The previous bounce-back level was reported at $28, with the resistance level unbreachable at $47.
Gains for the entire month of July have almost been erased. The July 2022 session that began with a positive tilt at $33.57 jumped up to $47.47, marking a nice gain, now indicates a huge value erosion in the last eight days. With this new Solana price action, it could be estimated that the MACD will probably mark a bearish crossover.
It would be pushing the prices of SOL further below as transaction volumes, momentum, and even RSI indicates a negative stance. The confirmation of a negative outlook in the short term would affect the long-term action too. A shooting start was developed in the previous week of price movement, representing buyers’ failure to withstand the selling force. Such a price scenario can force Solana to retest its recent June lows.