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On November 12, Solana (SOL) trading volume hit a four-month high of $12.60 billion, as the altcoin surpassed the $200 mark. However, this volume is now less than half, showing that the Solana bears are ensuring that the price cannot rise to $300.
But the question still arises: Is there still hope for SOL’s upward momentum? This analysis will consider those possibilities.
Solana Faces Declining Interest, Low Activity
According to Santiment, Solana’s volume dropped to $5.72 billion. In the cryptocurrency market, trading volume represents the total number of coins or tokens exchanged during a specific period of time. This important measure provides insights into market activity and liquidity, helping traders gauge the strength of price movements and overall interest in a particular asset.
From a price perspective, an increase in volume accompanied by an increase in the market value of a cryptocurrency is a positive sign.
However, in this case, the decline while the token traded at $216 shows that the Solana bears are limiting it from moving higher. Therefore, if volumes continue to decline, Solana’s price will likely follow a downward trend as well.
Another measure that affects this issue is Solana’s operating location. Active addresses measure the number of unique wallet addresses involved in sending or receiving funds during a given period of time. This measure reflects network activity and user engagement.
An increase in active addresses often signals increased adoption and usage, which can positively influence the price of a cryptocurrency. Conversely, a decline could indicate waning interest in the network, which could put downward pressure on prices.
According to Glassnode, Solana’s active addresses dropped from over 20 million in the last days of October to 17.98 million. If this downtrend continues, SOL may not have enough user engagement to sustain the uptrend.
SOL Price Forecast: Falling Below 200 USD?
On the daily chart, the Solana bears pushed the price back down as soon as it reached $222.49. This pullback ensures that the altcoin’s hopes of reaching $300 have been undermined. As mentioned above, volume has decreased, which is also confirmed on the chart.
If so, Solana’s price could drop to $190.30. This will happen if selling pressure increases and the SOL bears continue to control the price direction.
On the other hand, an increase in volume accompanied by buying pressure could disprove this hypothesis. If that happens, Solana price could break above the $225 level and continue to rise towards the $300 level.
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