Crypto News

Is Solana Price A Buy After Dipping 5% to $23.31 or Will it Retrace Lower?

Disclaimer Please note that we are not authorised to provide any investment advice. The information on this page should be construed for information purposes only. We may earn commissions from the products mentioned on this site.
author imageArslan Butt Last updated:

Solana

Solana (SOL) is a blockchain project that has seen tremendous growth over the past few days. After reaching an all-time high of $25.31, Solana price has dropped 5% to $23.31 in the last 24 hours. This drop has caused many investors to wonder if now is a good time to buy Solana or if it will retrace lower.

In this article, we will discuss the factors that could influence Solana’s price in the near future and whether or not it is a good buy at its current price level.

The Solana (SOL) coin failed to halt its early-day declining rally and is now trading well below the $23 mark. SOL has performed so well in the last month that it has risen to second place on the list of top chains in terms of NFT trade volume.

In fact, SOL’s NFT trade volume had increased significantly. However, the gains appear to be fading as the cryptocurrency market has turned bearish. Notably, the overall value of the cryptocurrency market fell by more than 3%, but it remains well above the critical $1 trillion threshold.

The value of major cryptocurrencies has decreased in the last 24 hours as investors await the release of US GDP data on Thursday and consumer sentiment data on Friday.

Furthermore, the Solana (SOL) coin’s losses were exacerbated by Solana’s poor usage data or weak ecosystem development. Solana’s asset value was one of the most impacted by FTX’s demise, with its market capitalization falling by 70%.

Solana’s active user base has been declining since mid-2022, according to Nansen usage data.

Meanwhile, the Solana ecosystem suffered from user mistrust caused by major hacks. One of the most significant cryptocurrency exploits in 2022 is the $312 million Wormhole bridge hack. In another case, users lost $8 million in SOL from their wallets. As a result, this was viewed as yet another major factor weighing Solana coin prices.

Risk-Off Crypto Market

The global cryptocurrency market failed to maintain its upward trend and fell by more than 3%. Bitcoin, the world’s largest digital asset, appears to be losing ground, having dropped below $23,000 as selling pressure has increased due to unfavorable macroeconomic factors. Thus, the modest risk-off wave in the crypto market has played a major role in undermining the Solana price.

In the meantime, the market participants appear reluctant to make any significant bids in anticipation of this week’s US economic growth data. Moving forward, the fourth quarter US GDP figures, which are anticipated on Thursday and could set the tone for the Fed’s policy meeting on January 31–February 1, are now the market’s primary concern.

Thereby, the majority of traders expect the Fed to increase interest rates by 25 basis points (bps) at its policy meeting the following week.

Poor Usage Data & Trust Issues

Solana’s network has been losing its popularity over the past year and the reason could be attributed to the frequent and lengthy network outages and hacks. According to Solana’s token terminal statistics, the number of weekly active users has been declining steadily since 2022, signaling a decline in network activity.

It is also worth noting that Solana’s ecosystem experienced severe hacks that damaged user confidence. One of the biggest cryptocurrency exploits of 2022 was the $312 million Wormhole bridge hack. In another incident, users’ wallets were emptied of $8 million in SOL.

Apart from this, the failure of FTX-Alameda, the primary organization supporting the Solana ecosystem, was another element that damaged the user’s trust in the Solana network.

As a result, Solana’s fundamental and market analysis reveals the weakness, which will certainly result in a sharp decline in the Solana coin.

An Increase in Cryptocurrency Scams

Another factor that may hinder the growth of the crypto sector is the rise in cryptocurrency scams. According to the Saskatchewan RCMP, an increase in cryptocurrency frauds cost the Swift Current and Maidstone regions to lose about $1 million last year. It is also worth mentioning that RCMP in Swift Current received reports from 105 citizens that they had been the victims of fraudulent phone calls, several of which involved bitcoin.

Notably, the scammers employed a range of strategies, such as deceptive advertising, authority fraud, and false courses that purported to teach people how to trade cryptocurrencies.

Strengthening US Dollar On Global Financial Markets

Moreover, the broad-based US dollar managed to stop its declining streak and rose in choppy trading on Wednesday as investors awaited the Federal Reserve’s policy decision next week. Therefore, the strong US dollar was viewed as another key factor that kept cryptocurrencies under pressure.

On the flip side, there is speculation that the US Fed and other central banks may soon stop raising interest rates as a result of a decline in global energy prices and a slowdown in inflation in advanced economies.

Solana Price

Solana is currently trading at $23.10, with a 24-hour trading volume of $804 million. In the last 24 hours, Solana has dropped nearly 5%. With a live market cap of $8.5 billion, Solana is currently ranked #10 on the market.

Solana

On the technical front, Solana is breaking above a major resistance level of $23.95. Above this, Solana’s price will be exposed to the next resistance levels of $26.10 or $27.45. On the lower side, a breakout of $24 has the potential to drive a selling trend until $22.50.

Solana has also closed bullish engulfing candles, while the RSI and MACD indicators are crossing over into the buying zone. All the technical indicators point to a buying trend, so let’s look for a buying trade above 23.75 today.

Aside from Solana, there are several other crypto tokens currently in their presale stage that have been generating buzz and may be worth investing in; MEMAG is one of them. Let’s take a look.

Meta Masters Guild (MEMAG)

MEMAG, a new mobile gaming guild, aims to improve the P2E experience by providing engaging games that encourage gamers to stay on the platform. Despite the fact that Meta Masters Guild’s presale has only been open for a few days, it has already sold more than half of its Stage 2 tokens.

The new metaverse cryptocurrency initiative, on the other hand, has raised more than $800,000 of its $1.12 million presale goal. This is an outstanding performance in such a short amount of time. The MEMAG coin’s price is also projected to increase once it is released on open markets, indicating a highly successful presale that has already begun.

In addition, the network is giving away $100,000 in MEMAG tokens to one lucky winner to demonstrate the community’s growth and the continued success of its presale.

Visit Meta Masters Guild Now

Related news

Dash 2 Trade - New Gate.io Listing

Our Rating

Dash 2 Trade
  • Also Listed on Bitmart, Changelly, LBank, Uniswap
  • Collaborative Trading Platform Token
  • Featured in Bitcoinist, Cointelegraph
  • Solid Proof Audited, CoinSniper KYC Verified
  • Trading Community of 70,000+ Members
Dash 2 Trade
Buy D2T

  This article was written for Business 2 Community by Arslan Butt.
Learn how to publish your content on B2C

Join our Telegram channel to stay up to date on breaking news coverage

author image

Author: Arslan Butt

Arslan is a professional live webinar speaker and derivatives (cryptocurrency, forex, commodities, and indices) analyst. Arslan holds an MBA in Finance, and an MPhil in Behavioral Finance.
Arslan brings a broad range of skills to help beginners evaluate financial data and investment trends, carry out technical analysis, fundamental analysis, and …

View full profile ›

More by this author:

Popular Topics

 Discuss This Article

Add a Comment

Thanks for adding to the conversation!

Our comments are moderated. Your comment may not appear immediately.

Get weekly insider business guides & reviews for free

Join our FREE Telegram Group Now!