The price of Solana (SOL), one of the most popular altcoin projects, fell 85% on June 3, seven months after surging 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. The SOL/USD pair is currently at a historically important level of support and it could see a pullback higher and the next $40-45 range in June, up about 25 percent from today’s price.
Are There Bullish Signals in Altcoin Price?
Although monthly lows are currently in sight, analyst Yashu Gola says a recovery scenario cannot be guaranteed. Solana faces headwinds as it trades at the same pace as Bitcoin, the largest cryptocurrency that typically drives trends among top altcoins. Notably, on June 4th, the weekly correlation coefficient between BTC and SOL was 0.92.
Additionally, according to the analyst, Solana is likely to see larger losses than BTC if Bitcoin breaks below the current psychological support level of $30,000. Meanwhile, as we reported at Kriptokoin.com , the US Federal Reserve (Fed) appears determined to raise interest rates and shrink its balance sheet. As a result of this tough monetary policy, riskier assets like Bitcoin are likely to continue falling, hurting Solana’s bullish outlook.
A break of SOL below the current support level (around $35) according to Gola, which acts as a strong support area from March to July 2021 and is preceded by a 1,200% price rally, as shown below. This increases the likelihood of a drop towards the $18-25 area. This bearish scenario takes SOL nearly 60 percent below today’s price. SOLANA Network Outages Their network, It turns out to be practically unusable for hours on end for its main “dapps”, including loan protocol Solend and decentralized exchange Serum. Solana’s latest software bug was uncovered on June 1st, shutting down the network for 4.5 hours. Blockchain’s largest outage occurred in January and was down for nearly 18 hours.
Solana cuts, investor competition Risks scary in its favor and it has already fallen with several traders who have put their capital elsewhere. Miles Deutscher, an independent market analyst, believes crypto investors have been 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 take market share,” he said.