Solana price historically sells off by 50% when this network indicator doubles, could it happen again?


  • Solana price is auctioning within a consolidative range, likely to resolve with an explosive move.
  • The SOL network shows an uptick in development activity, which has previously played a role in price fluctuations.
  • A break on either side of the coiling zone will result in a 15% swing.

Solana price is preparing for its next surge as price consolidates since November. Based on recent months, the SOL price leans more bearish. Still, the current range can squeeze out more gains. Key levels have been defined to assess a bullish and bearish scenario.

Solana price setting up shop

Solana price has endured ping-pong price action since the middle of November. On December 12, the centralized smart-contract token is bound to a range that has compressed from a 15% spread down to just 6% within three weeks. On smaller time frames, the congestion has day traders making hasty bets against one another while dually fighting for position with algorithmic trading bots. 

Solana's price is currently trading at $13.12. On-chain metrics display the algo traders’ interest in SOL despite the waning liquidity. According to Santment's Development Activity indicator, the Solana network witnessed a 100% increase in development in the last three weeks. The metric calculates updates on Solana's GitHub Repository. GitHub is a medium for programmers, often algorithmic traders, to collaborate and share codes. The repository rose to 78 billion on September 6 from 35 billion on November 28.

Historically, Solana's Development Activity indicator has been rather timely, with sudden market selloffs correlated to influxes in development. On more than one occasion since September 2021, when the indicator doubled relative to its previous swing, the Solana price would sell off by more than 50%. These selloffs can be spotted on December 18, 2021, April 2, 2022, and August 24, 2022. 

tm/sol/12/12/onchaion

From a technical standpoint, the Solana price consolidation could lead to a 15% swing in either direction. The projection is based on classical price action techniques utilizing the largest spread within the current range. A break above the recent swing high at $14.43 could prompt a rally into the mid-$16 zone. On the contrary, a breach below the recent swing low at $12.82 could be the catalyst of a 15% decline toward the yearly low at $10.94.
tm.sol/12/12

SOL/USDT  12-Hour Chart

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Could USDT depeg following recent accusations from Consumers' Research?

Could USDT depeg following recent accusations from Consumers' Research?

A digital billboard accusing Tether of corruption was featured in Times Square. Historically, stablecoins often depeg following controversies surrounding respective parent companies. Tether recently launched a new synthetic dollar backed by gold.

More Cryptocurrencies News

Ethereum Layer 1 and 2 monthly active users surpass 25 million milestone amidst crypto bloodbath

Ethereum Layer 1 and 2 monthly active users surpass 25 million milestone amidst crypto bloodbath

Monthly active users on Ethereum chain’s Layer 1 and 2 projects have crossed 25 million per Token Terminal data. Despite the rise of Ethereum’s competitors like Solana, with the meme coin narrative, Ether remains relevant among traders. 

More Ethereum News

ZKsync token faces massive sell-off following launch

ZKsync token faces massive sell-off following launch

A report from Nansen on Tuesday revealed that the top 10,000 wallets that were airdropped ZKsync's newly launched ZK token have begun selling their holdings. The price of ZK has dropped 34.5% since its inception after nearly half of the top wallets that received its airdrop on Monday sold all of their allocation.

More ZKsync News

Global Ethereum ETFs experience surge in net inflows as Hashdex files for combined spot ETH and Bitcoin ETF

Global Ethereum ETFs experience surge in net inflows as Hashdex files for combined spot ETH and Bitcoin ETF

Ethereum is down 3% on Tuesday as Hashdex submitted a market-weighted crypto ETF to the SEC, aiming to track the price of ETH and Bitcoin. Global investors have also increasingly purchased ETH ETFs amid declining exchange reserves.

More Ethereum News

Bitcoin: Has BTC found a local price bottom?

Bitcoin: Has BTC found a local price bottom?

Bitcoin (BTC) price looks set for a mild fall this week, weighed by slight outflows in the US spot ETFs and the US Fed keeping a hawkish interest-rate outlook despite easing inflation. Technical indicators suggest that BTC could face a further 5% correction in the short term before resuming the uptrend.

Read full analysis

BTC

ETH

XRP