Solana’s native token, SOL, witnessed notable price swings throughout June 2024, closing at $144 after peaking at $175 on June 5 and plunging to $124 on June 24. Internal network challenges and market conditions contributed significantly to this volatility.
Over July 2-3, SOL dropped by 8.5%, testing the $140 support level and wiping out gains from the preceding three days, when it peaked at $154.80. By mid-June, SOL had dipped to around $142, marking a 23% decline over three months, paralleling the broader cryptocurrency market’s 9% drop during the same period.
Despite these hurdles, SOL briefly saw a bullish trend at June’s end. This upswing followed the filings for the first Solana exchange-traded funds (ETFs) in the U.S. by VanEck and 21Shares on June 27 and 28. VanEck’s filing alone caused a 6% surge in SOL’s price, temporarily boosting market sentiment that had been dampened by concerns over Mt. Gox repayments. During this period, SOL’s cumulative volume delta (CVD) recorded a net positive $29 million, driven by heightened spot buying on Coinbase.
However, the impact of the ETF filings on the market proved limited. While SOL had initially outperformed Ethereum (ETH) in March, this trend reversed following ETH’s ETF approval in the U.S., and despite the SOL ETF filings, the ratio between ETH and SOL remained stagnant. Derivative markets also showed no sustained bullish demand, with SOL’s volume-weighted funding rate and open interest returning to neutral levels.
On-chain data from Solana indicated a surge in daily transaction volumes, increasing from 32.7 million on June 1 to 43.8 million by June 30, marking a nearly 34% rise. Yet, the growth in new addresses joining the network slowed slightly, with June welcoming 25.4 million new addresses compared to 26.65 million in May. Daily active users peaked at 2 million on June 4 and June 26 but decreased to 1.6 million by month-end.
Despite a decline in total value locked (TVL) within Solana’s ecosystem from $4.8 billion on May 1 to $3.4 billion by June 30, a 29% decrease, the platform’s TVL had grown by 140% year-over-year, starting at $1.4 billion on January 1, 2024.
Solana maintained its position as a significant player in the decentralized finance (DeFi) space, capturing nearly 25% of the DEX market with a total trading volume of $38.4 billion in June, second only to Ethereum.
Technical indicators, however, pointed to a bearish outlook for SOL. The 1-day Simple Moving Average (SMA) displayed a negative crossover, indicative of increased bearish activity. The Moving Average Convergence Divergence (MACD) showed a consistent decline in the green histogram, suggesting heightened selling pressure. Should SOL breach the critical support level at $128, further declines towards the major support at $87 could be anticipated, although SOL currently remains above the 200-day SMA.
The price action for Solana maintained a symmetrical triangle formation, suggesting potential future movements. A bounce off the 200-day SMA support might lead to a 22% upswing, potentially reaching $164, aligning with the triangle’s upper trend line.
