As we reported at Kriptokoin.com, Solana (SOL) made a remarkable rally in November, rising above $200. However, the decline in trading volume from the four-month peak caused investors to question their hopes for an increase. So, is a new rally possible in Solana? This analysis evaluates the current indicators.
Decreased Interest and Low Activity in Solana
According to Santiment data, Solana’s trading volume decreased from $12.6 billion to $5.72 billion. Trading volume represents the total amount of coins traded in a given period. This metric provides important information about market activity and liquidity. An increase in volume typically reflects the strength of price movements and investor interest.
However, Solana is trading at $216 with this drop in volume. This suggests that the bears are trying to keep the price from going higher. If the volume decline continues, the SOL price will also feel downward pressure.
Will the Decline in Active Addresses Limit the Rise?
The decline in Solana’s active address count suggests that the network’s user engagement is declining. According to Glassnode data, the number of active addresses dropped from over 20 million in late October to 17.98 million in mid-November. Active addresses measure unique wallets that have sent or received funds in a given period. This metric shows user engagement and adoption on the network.
An increasing number of active addresses usually leads to more adoption and has a positive impact on the price. However, a decrease indicates that the network interest is decreasing and this will put downward pressure on the price. If this downtrend continues, it will be difficult for Solana to maintain its upward momentum.
SOL Price Prediction: Could We See Below $200?
On the daily chart, when Solana price reached $222.49, the bears stepped in and the price pulled back. This significantly weakened the altcoin’s hopes of reaching $300. The decreasing trading volume and increasing selling pressure further strengthened this pullback. If this trend continues, Solana price could drop to $190.30.
In contrast, an increase in volume and buying pressure could invalidate the current bearish scenario. In such a case, Solana’s price could rise above $225 and start a move towards $300. Market players should closely monitor these critical levels. However, it should not be forgotten that cryptocurrency investments are risky. At this stage, it is important for investors to evaluate the risks by conducting their own analysis.
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