SOL Token Sees Price Dip Amid Broader Crypto Market Correction and Rising Ether Dominance
Summary:
Solana's native token, SOL, has seen a 3.45% decrease in the past 24 hours, underperforming the broader crypto market. Several factors, including the growing potency of rival blockchain Ether (ETH) and stagnant inflows into the Solana ecosystem, contribute to this decline. As the larger crypto market corrects, SOL's underperformance deepens, especially considering the potential for regulatory approval for spot Ether exchange-traded funds in the US.
Solana's native token, SOL, has experienced a 3.45% decrease in value over the past day, pricing at around $143.50 on June 15. This is an underperformance compared to the larger crypto market's fall of around 1.5% during that same timeframe. Several factors driving SOL's value down include the higher performance of competing blockchain, Ether (ETH), and a standstill in the influx into the Solana ecosystem.
The general dip in the crypto market is impacting SOL's price, and the potential for regulatory approval for spot Ether exchange-traded funds in the US adds to the underperformance. Since May 20, when the US Securities and Exchange Commission began asking Ether ETF applicants to revise their 19b-4 filings, the SOL/ETH pair has dipped 22.65%.
This alludes to Solana's diminishing market dominance as Ether is becoming the preferred crypto. Since May 20, SOL's share in the crypto market has slumped from 3.30% to 2.82%, while Ether's share has spiked from 15.78% to 18.04%. CoinShares' report shows that Ether investment garnered a whopping $68.9 million in the week ending June 8, dwarfing Solana's $0.7 million.
As the total value locked (TVL) in the Solana ecosystem remains stagnant, SOL's price is dropping. Furthermore, the leading projects on the Solana network — Jito, Marinade, and Kamino — have observed a slight decrease in their SOL reserves over the last day.
The simultaneous dip in SOL's price and project reserves could be indicative of investor caution, possibly anticipating market downturns influenced by external elements. For instance, an ascending US dollar index syncs with SOL's price slump this week, signaling less risk appetite among investors. SOL's price drop is further intensified by a significant decrease in decentralized exchange users on its blockchain.
Technically, SOL's fall in price today is a result of a technical correction which began on June 6. On that date, it challenged its ongoing descending trendline as resistance, causing the SOL/USD pair to drop more than 18%.
As of June 15, SOL was attempting its multi-month ascending trendline support for a potential bounce back towards its 50-day exponential moving average (at approximately $158.65) by the end of June—an around 13.50% increase from current prices. Nonetheless, breaking beneath the trendline support might risk a drop towards the 200-day exponential moving average (around $129.50).
This information serves a general purpose and shouldn't be interpreted as legal or investment advice. The presented insights, thoughts, and opinions are solely of the author and don't necessarily depict or represent Cointelegraph's views and opinions.
Published At
6/15/2024 2:54:46 PM
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