Solana Faces Potential 16.5% Price Drop Amid Declining On-Chain Metrics and Market Pullback

• Solana is currently facing bearish pressure due to on-chain metric declines and a broader market pullback.
• Despite the setback, the formation of a symmetrical triangle pattern could offer support to avoid a significant downtrend.
• Key metrics like active and new addresses have decreased by over 20%, suggesting prolonged correction phases.

Solana’s price is at risk of a 16.5% drop amid declining on-chain metrics and market corrections, but symmetrical triangle patterns may offer a reprieve.

Solana’s Symmetrical Triangle Formation and Market Trends

Solana’s price movements have recently been characterized by a mid-term sideways trend within the confines of a symmetrical triangle formation. This technical pattern, marked by converging trendlines, suggests a phase of consolidation that could lead to a resumption of the previous trend. The current price trajectory has been influenced by both internal, on-chain factors and broader market dynamics.

Decline in On-Chain Metrics

The recent data from TheBlock analytics underscores significant declines in key on-chain activities. The number of new addresses dropped from 1.27 million to 980.68k, marking a 22.79% reduction. Similarly, active addresses decreased from 2.09 million to 1.6 million, a decline of 23.44%. These metrics are often indicative of waning user interest and participation, which can exert downward pressure on the asset’s price.

Impact of Technical Indicators

The interplay between different technical indicators also suggests a bearish outlook for Solana. A bearish crossover between the 20-day and 50-day Exponential Moving Averages (EMA) has been observed, which typically heralds intensified selling pressure. Additionally, Solana’s market price fell from $164 to $151 during a period of low volatility over the weekend, amounting to a 7.5% loss.

Market Sentiment and Potential Price Movements

Despite these bearish signals, the symmetrical triangle pattern on the daily chart may provide a cushion against a major downtrend. If the price manages to rebound from the triangle’s support levels, this could prolong the current sideways movement and possibly ignite another rally. Conversely, a breach below the $150 support level could see the price plummet by another 16.5%, testing the triangle’s lower bounds around $126.

Conclusion

In summary, Solana is navigating a challenging landscape marked by declining on-chain metrics and bearish technical indicators. However, the symmetrical triangle pattern offers a glimmer of hope. If market sentiment turns favorable and key support levels hold, Solana could escape a major correction. Investors should closely monitor these patterns and metrics to make informed decisions, especially in a volatile market environment.