Solana (SOL) Price Plunges to 30-Day Low: What's Next? – The Crypto Basic

Solana price dropped to a 30-day low of $139 on Friday, June 14. In our on-chain analysis, we explore several key indicators that could trigger a recovery phase for SOL in the coming days.

Solana succumbs to further declines following Federal Reserve’s hawkish interest rate policy

Since the approval of an Ethereum ETF in late May, investor attention has shifted away from other competing layer-1 projects, with projects like Solana (SOL), Avalanche (AVAX) and Cardano (ADA) all struggling to gain traction.

However, despite the best efforts of Solana node validators to ease the selling pressure, SOL prices fell further this week as the US Federal Reserve’s decision to pause interest rates dashed bullish investor hopes of a rate cut in the first half of 2024.

As mentioned above, the price of Solana fell to $139 on June 14, its lowest price since May 13, 2024. This highlights how Solana has struggled since the Ethereum ETF was approved by the U.S. Securities and Exchange Commission (SEC).

In early June, Solana node validators began staking more SOL coins to earn passive income and mitigate selling pressure during the market downturn. However, the US Fed’s hawkish interest rate decision this week has negatively impacted the outlook for SOL’s recovery.

Solana Price Prediction: Traders build up $120M long positions as bottom approaches

Although Solana price remains below the key psychological support level of $140, recent trends observed among speculative traders suggest that a bottom in the SOL market may be near.

After a 30-day downward trajectory, Solana traders are now making strategic moves to forecast a market bottom.

Coinglass’ Liquidation Map chart compares the value of SOL LONG contracts to active SHORT contracts listed on various derivatives trading platforms.

As you can see below, SOL long traders have $120 million worth of active contracts in place around current prices, positioning themselves to capture big profits when spot prices start to rise again.

Meanwhile, in comparison, the total number of currently active short contracts is around $109 million. In effect, this indicates that the long contracts outnumber the short contracts by more than $10 million, signaling that bulls are moving in to take control in the next market phase.

In terms of short-term support and resistance levels, bulls will likely face a stiff sell wall near the $150 level. As evidence of this, the chart shows that $96 million worth of active short contracts are in play at the $150.54 level.

To avoid such heavy losses, a majority of traders may implement massive selling and deploy stop-loss triggers as the SOL price approaches the $150 levels in the coming days, which could slow down the recovery phase.

However, if the bulls can avoid the pullback, the resulting short squeeze could lead to a bounce towards the $170 levels.

Conversely, if the correction phase drags on, Solana Bulls can look to the $130 level as the next major support cluster.