Solana On-Chain Metrics Suggest Another Price Dip on the Horizon

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The Solana price has been on a larg­er down­trend after the FTX col­lapse, and investors are left won­der­ing if a bot­tom has been reached. It’s no secret that Solana had con­nec­tions to Sam Bankman-Fried and FTX, which

While many cryp­tocur­ren­cies man­aged to chart relief ral­lies after tak­ing a bat­ter­ing due to the col­lapse of FTX, the SOL price remained bear­ish. Solana was one of the biggest under­per­form­ers in the cryp­to space in Novem­ber 2022. 

The SOL price per­for­mance in Novem­ber has been con­trolled by bears, but can it make one final push to the upside before the end of the year?

Retailers Wary of SOL 

From a Novem­ber peak of $38.79, the Solana price fell 65% fur­ther and is cur­rent­ly trad­ing at $13.50. 

Fur­ther­more, dai­ly trade vol­umes had dropped by 25% from the pre­vi­ous day, mea­sur­ing around $220 mil­lion at press time. Retail inter­est and trade vol­umes for SOL have tak­en a major hit since the fall of FTX. 

Solana Trade Volumes | Source: Santiment
Solana Trade Vol­umes | Source: San­ti­ment 

Trade vol­umes are cur­rent­ly sit­ting at month­ly lows. And while the Solana spot mar­ket looked large­ly bar­ren, the futures mar­kets weren’t show­ing much better. 

Solana’s open inter­est was down by 1.25% and stood at $208.9 mil­lion on Dec. 2. 

Solana open interest | Source: Coinalyze
Solana open inter­est | Source: Coin­a­lyze

Fund­ing rates were also still neg­a­tive, which means that short-posi­tion traders were dom­i­nant and were will­ing to pay long posi­tions. This is nor­mal­ly indica­tive of a bear­ish trend. 

In addi­tion to that, there was around $207,000 worth of long liq­ui­da­tions and $89,000 worth of short liq­ui­da­tions on SOL in the past 24 hours. More longs being liq­ui­dat­ed is anoth­er obvi­ous sig­nal of a bear­ish trend.

SOL Liquidations Statistics | Source: Coinalyze
SOL Liq­ui­da­tions Sta­tis­tics | Source: Coin­a­lyze

Low Social Interest in Solana Weighs Down Price 

Social met­rics for Solana showed no major spikes. Social vol­umes have been dwin­dling while weight­ed social sen­ti­ment was still in the neg­a­tive territory. 

Solana social metrics | Source: Santiment 
Solana social met­rics | Source: San­ti­ment 

Neg­a­tive weight­ed social sen­ti­ment sig­naled a low demand for SOL in the mar­ket. Fur­ther­more, recent NFT sta­tis­tics from Mes­sari showed that the Solana land­scape was one of the worst hit by bears in regard to that spe­cif­ic sector. 

Solana NFT sales fell by 48%, the high­est drop in sales com­pared to its peers like Ethereum and Polygon. 

One pos­i­tive on-chain trend for SOL was its devel­op­ment activ­i­ty pick­ing up steam, which could poten­tial­ly boost investor confidence. 

Solana development activity  | Source: Santiment
Solana devel­op­ment activ­i­ty  | Source: San­ti­ment 

Nonethe­less, with every­thing else tilt­ing bear­ish, there is only so much that devel­op­ers can do to push price action. The over­all out­look for Solana sug­gests a pro­longed recov­ery, with bears still dom­i­nat­ing bulls in the near term. 

The $20 psy­cho­log­i­cal resis­tance could play an impor­tant role in con­firm­ing a SOL price recov­ery. If the bear­ish price action con­tin­ues, the price could pos­si­bly dip below the $10 level. 

Disclaimer

All the infor­ma­tion con­tained on our web­site is pub­lished in good faith and for gen­er­al infor­ma­tion pur­pos­es only. Any action the read­er takes upon the infor­ma­tion found on our web­site is strict­ly at their own risk.

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