Skip to main content

Solana’s 13% Dip: Can On-Chain Support Halt the Decline?

Solana (SOL) has experienced a significant downturn, shedding approximately 13% of its value in the past week. This drop has pushed the asset back to a critical on-chain support zone, raising the question: will this level prevent further losses?

Strong On-Chain Support for Solana

According to Glassnode, a leading on-chain analytics firm, Solana boasts robust support between $145 and $147. This assessment is based on their Cost Basis Distribution (CBD) metric, which reveals the acquisition prices of circulating SOL tokens.

Glassnode’s analysis highlights several key price zones:

  • $155 – $157: Approximately 31 million SOL tokens were last acquired within this range.
  • $164 – $166: Around 29 million SOL tokens were purchased here.
  • $145 – $147: A significant cluster of 13 million SOL tokens was acquired in this region, which Solana’s price is currently retesting.

Solana Cost Basis Distribution Chart

Understanding Cost Basis and Market Reactions

The cost basis is a crucial metric for investors. Retests of these levels often trigger noticeable market reactions, particularly when a substantial portion of the circulating supply is concentrated within a narrow price range. Typically, retests from above (while investors are in profit) tend to lead to buying pressure as holders seek to protect their investment or capitalize on a perceived dip. Conversely, retests from below might induce panic selling from underwater investors.

With Solana currently retesting the $145 – $147 support from above, there’s potential for buying activity to emerge. A successful bounce could propel the price towards the next resistance zone at $155 – $157.

Other Altcoins

Glassnode also analyzed Tron (TRX), finding substantial support near $0.26 – $0.27, where a large number of TRX tokens are held.

Current SOL Price and Outlook

Solana is currently trading near the lower bound of the $145 – $147 support zone. The coming days will be crucial in determining whether this support holds, or if further price declines will unfold.

Disclaimer: This analysis is for informational purposes only and should not be considered financial advice.

Source: TradingView, Glassnode

Latest Posts