The price of Solana (SOL), one of the popular altcoin projects, fell by 85% on June 3, seven months after hitting above $260. SOL price fell more than 6.5 percent on the day to $35.68 after failing to recover from a 10-month low. Currently sitting at a historically important support level, the SOL/USD pair could see an upside pullback in June and the next $40-45 area, up about 25 percent from today’s price.
Are there bullish signals in altcoin price?
Although monthly lows are currently seen, a recovery scenario cannot be guaranteed, according to analyst Yashu Gola. Solana faces headwinds as it trades in the same pace with Bitcoin, the largest cryptocurrency, which typically influences trends among top altcoins. Notably, the weekly correlation coefficient between BTC and SOL was 0.92 as of June 4.
Moreover, according to the analyst, Solana is likely to see bigger losses than BTC if Bitcoin breaks below the current psychological support level of $30,000. Meanwhile, as we have also reported as Kriptokoin.com, the US Federal Reserve (FED) seems determined to raise benchmark interest rates and shrink its balance sheet. As a result of this harsh monetary policy, riskier assets like Bitcoin are likely to drop further, hurting Solana’s bullish prospects. A break of the SOL below the current support level (around $35) according to
Gola, acting as a strong support area in March-July 2021 and preceded by a 1,200 percent price rally as shown below It increases the probability of a decline towards the $18-25 range. This bearish scenario puts SOL almost 60 percent below today’s price.
Solana network outages
The bearish outlook for SOL, according to the analyst, is that the Solana Blockchain is facing repeated outages and thus its network, the lending protocol Solend and its central The non-change turns out to be nearly unusable for hours for his key “dapps,” including Serum. Solana’s latest software glitch was revealed on June 1, which shut down the network for 4.5 hours. Blockchain’s biggest outage occurred in January and was down for almost 18 hours.
Cuts, competition from investors Solana risks frightening in his favour, and it has already coincided with several traders turning their capital elsewhere. Miles Deutscher, an independent market analyst, believes crypto investors were cautious after witnessing the recent Terra debacle. Still, the analyst claims Solana’s outages will decrease over time as the network matures. “But if they fail to suppress such events, other L1s [layer-1 blockchains] will continue to eat away at market share,” he said.
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