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As Solana’s price reaches a critical juncture, fluctuations in social volume and active addresses signal potential risks for the cryptocurrency.
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Market analysts are closely observing Solana’s $180 support level, deeming it essential for the asset’s stability in the coming months.
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“The prevailing market conditions could drive Solana into a bearish territory unless a resurgence in activity is observed,” a COINOTAG analyst stated.
Solana’s price dynamics show pivotal trends in social volume and active addresses as it hovers near the critical $180 support level, raising investor concerns.
Social Volume – A Signal for Solana’s Price Moves
Solana’s social volume has revealed a noteworthy connection to its price movements, which is supported by recent analytical data. Each surge in social engagement about Solana often precedes consequential price shifts.
In recent months, increased chatter on social platforms regarding Solana has coincided with price advances, hinting at a sentiment-driven surge in buying activity.
Source: Santiment
Nevertheless, while a rise in social volume can indicate bullish sentiment, it may also reflect an overextended market situation, ripe for potential corrections.
Traders must stay vigilant regarding sentiment trends, particularly if Solana fails to maintain its position above $180. Prolonged increases in social discourse without the backing of price increases could signal weakening demand and foreshadow further downturns.
Decreasing Active Addresses
A significant concern arises from the sharp decline in Solana’s active addresses. In the month of December alone, the number of active addresses plummeted from nearly 6 million to slightly over 3.5 million, marking a steep decline of more than 40%.
Despite a slight rebound in early January, the activity levels still fall short of previous benchmarks, signaling a drop in user engagement and network activity.
Source: The Block
This trend of declining active addresses raises red flags regarding Solana’s usability and user sentiment. Historically, such decreases in user engagement are precursors to negative price movements, indicating a drop in demand for the asset.
To maintain its price stability around the $180 mark, Solana must reverse the trend of diminishing active addresses. A lack of resurgence in user engagement could lead to further price declines.
Solana – What’s Next?
As it stands, Solana’s current price situation is precarious, with $180 acting as a crucial pivot. The Relative Strength Index (RSI) is approaching oversold territory, suggesting that a breach of the $180 mark could trigger additional selling pressure.
Possible immediate downside targets for Solana include $165, followed by the range of $130-$150 where stronger support levels may be encountered.
Source: TradingView
If Solana can reclaim the $190 threshold, it may indicate the potential for a relief rally targeting $200. Conversely, the interplay of weak trading volumes alongside declining on-chain activity might limit any upward momentum. Without renewed buying interest or significant market catalysts, Solana risks entering a prolonged consolidation phase or deeper decline, underscoring the importance of maintaining stability around the $180 level.
Conclusion
In conclusion, Solana’s price trajectory is being critically influenced by its social volume and active addresses, both of which play key roles in shaping investor sentiment and market dynamics. Maintaining its support at $180 is not just a matter of technical analysis but also involves a return to stronger engagement metrics among users to bolster confidence in the asset.
