Solana’s (SOL) price fell on June 3, bringing its net paper loss to 85% seven months after exceeding $ 260.
SOL prices fell more than 6.5% daily to $ 35.68, after failing to reach the 10-month low.
Now sitting at a historically important support level, the SOL / USD pair could see a return in June, with an eye on the $ 40- $ 45 range next, up about 25% from today’s prices.
60% SOL price reduction ahead?
However, the benchmark is far from guaranteed and Solana faces headwinds from trading Bitcoin (BTC), the top cryptocurrency (by market value) that usually affects the development of top altcoins.
In particular, the weekly correlation coefficient between BTC and SOL was 0.92 as of 4 June.
What’s more, Solana is likely to see even more losses than BTC if Bitcoin falls deeper below the current psychological support level of $ 30,000.
At the same time, the Central Bank is determined to raise the reference rate and lower its balance sheet. As a result of this hawkish policy, riskier assets such as Bitcoin have room to decline, which harms Solana’s bullish outlook.
Breaking down SOL’s current support level – around $ 35 – increases the likelihood of a decline towards the $ 18-25 range, which served as a strong support area in March-July 2021, and was ahead of a 1,200% price increase, as shown below.
This bearish scenario would put SOL almost 60% below today’s price.
Bearish’s prospects for SOL also come as Solana’s blockchain faces repeated disruptions, making its network virtually unusable for its key ‘daps’, including Solend’s lending protocol and distributed swap, for hours on end.
Solana’s latest software bug occurred on June 1, shutting down the network for 4.5 hours. The biggest blockchain failure occurred in January and was down for almost 18 hours.
Confirmation operators have successfully restarted the Mainnet Beta at 21:00 UTC, following approximately 4 and a half hours of failure after the network failed to console. Telephone companies and dapps will continue to restore customer service in the coming hours.
– Solana Status (@SolanaStatus) June 1, 2022
The risk risks intimidating investors for the benefit of Solana’s competition and has already coincided with some traders splitting their capital elsewhere.
Just sold everything mine $ SOL for $ ADA. Solana is a great project but personally I can not in good faith continue to invest in track 1 which goes out regularly (partial and major failures about 11 times).
– $ Smac07_NFT $ (@ Shawn_Deezy07) 31 May 2022
Miles Deutscher, independent marketer, believes Cryptocurrency investors have become wary of witnessing a recent Terra fiasco. Nevertheless, an expert claims that Solana’s suspension would diminish over time as the network matured.
Related: Alchemy announces support for Solana Web3 applications the day after the blockchain is stopped
“But if they do not succeed in stifling such events, then there are other L1s [layer-1 blockchains] will continue to eat up its market share, “he said.
8 / The reasons why I like Solana are still there:
Milds that use a single global state (liquidity is not itemized).
• Low cost and fast (despite taking care of most transactions of all chains).
• The third most developed in the chain (Electric Capital)
• Large list of VC supporters
– Miles Deutscher (@milesdeutscher) June 2, 2022
The views and opinions expressed herein are those of the authors only and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading business involves risk, you should conduct your own research when making a decision.
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