- Solana has struggled in August and, trading currently at $138, has been unable to break past the 20-day EMA and 50-day SMA, which have proven tough resistances.
- Most metrics, from the low RSI to the negative Weighted Sentiment, indicate bearish pressure is at a high, with analysts predicting a tougher September.
Despite being the best-performing major crypto in the past year, Solana has struggled in August. The token started the month at $180 before dipping to a monthly low of $112. While it has recovered since then, it’s still trading nearly 25% lower, and analysts fear it could dip even further in September.
SOL trades at $138.37 at press time, losing 4.75% in the past day, way above the average market dip of 1.8%. It was the biggest loser in the top 10 cryptos, with the likes of Ether and BTC only shedding 2.4% on average.
Solana could be headed for more pain in the coming month. The fifth-largest token in the market, the token has recently dipped below its 20-day exponential moving average (EMA), which stands at $147.7, and the 50-day simple moving average (SMA), which stands at $155.74.
The 20- and 50-day moving averages show the average price that the token has closed over the past 20 and 50 days, respectively. In a bullish market, these MAs can act as strong support, giving the token a platform to bounce back after a short-term dip.
However, in a downtrend, they can prove to be tough resistances, as is happening with SOL, as shown in the graph below.
SOL’s other metrics don’t paint a better picture. Its Relative Strength Index has remained low throughout August, surging briefly mid-week before dipping back again. It currently stands at 33, showing that the buying pressure is very low.
Coinglass data shows that it’s not any better on the futures side, where the funding rate turned negative yesterday. Exchanges set funding rates and payments to maintain a balance between the price of the futures contract and the underlying asset it tracks. When they turn negative, it shows that the pressure from the bears is disproportionately high.
The token’s weighted segment also turned negative, showing investors could lose faith in SOL.
Some analysts believe that the downturn could continue for Solana, with one telling his 49,000 X followers that September will be “brutal” for SOL and other altcoins.
One of the key factors behind Solana’s performance is the performance of its ecosystem. For years, SOL was only dependent on the performance of its community. However, its ecosystem has expanded in the past three years, it has become home to projects such as Dogwifhat, Render (which switched last year from Ethereum), Bonk and Jupiter.
In the bull market, these tokens were among the biggest gainers and pushed Solana along. However, in the past week, WIF and BONK have lost 10%, while JUP has shed 11 and BOME has slid 17%. These dips are further increasing the selling pressure on SOL.
