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Solana (SOL) Price Could Fall by Another 60% After NFT Projects Abandon It

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Solana (SOL) Price Could Fall by Another 60% After NFT Projects Abandon It

The Solana (SOL) price could resume its freefall toward $4 due to bearish indicator readings and negative Solana news.

SOL is the native token of the Solana blockchain platform. Solana is unique because it uses both a proof-of-history (PoH) consensus and combines it with the more well-known proof-of-stake (PoS) consensus mechanism. The platform was founded by Anatoly Yakovenko and specializes in smart contracts.

There was conflicting Solana news last week. On Dec. 23, Delphi Digital announced that Solana was now the number two ecosystem for NFTs, trailing only Ethereum. Measuring the 30-day sales volume, Solana left behind Cardano, Polygon, and BNB chain.

However, three days later, negative Solana news hit. DeGods and y00ts, two of the most significant NFT projects in the Solana ecosystem announced that they are migrating to Ethereum and Polygon, respectively. Once this occurs, it is possible that Solana will fall outside of the top 10 sales volume entirely. While there are rumors that both projects asked the Solana foundation for money in order to remain on the blockchain, this has yet to be confirmed.

Solana Price is Not Done Falling

The Solana price has decreased since its all-time high of $259.90 in Nov. 2021. Between May – Nov. 2022, the SOL price bounced at the $29 horizontal support area. However, it broke down on Nov. 14 amidst a massive bearish engulfing candlestick. The SOL price reached a low of $10.94 before the end of the month.

Even though the decrease since the breakdown has been substantial, the most likely SOL price forecast is the continuation of the downward movement toward $4. The two main reasons for this are:

  1. The weekly RSI, which decreased below 25 and has not generated any bullish divergence
  2. The fact that there is no horizontal support until $4

Moreover, the SOL price is in the process of falling below its $10.94 lows and invalidating the slightly bullish weekly candlestick of Nov. 21 – 28.

Measuring from the current price, a drop to $4 would amount to a decrease of 64%.

In order for the trend to be considered bullish, the SOL price has to reclaim the $29 horizontal resistance area.

Solana (SOL) Price Could Fall by Another 60% After NFT Projects Abandon It

SOL/USDT Weekly Chart. Source: TradingView

No Short-Term Relief

The readings from the daily time frame align with those from the weekly one. Firstly, the SOL token price broke down from the $13 horizontal area. This comes after previously twice validating the area as support (green icon).

Next, the daily RSI has broken down from its bullish divergence trendline, which preceded the previous relief rally. As a result, the short-term rally has likely, and the long-term downward movement will now continue over the next 24 hours and beyond.

Solana (SOL) Price Could Fall by Another 60% After NFT Projects Abandon It

SOL/USDT Six-Hour Chart. Source: TradingView

To conclude, the most likely Solana price forecast is bearish, supporting a drop toward the $4 horizontal support area.

Additionally, negative Solana news relating to the desertion of two of the biggest NFT projects in the Solana ecosystem could hasten the fall.

For BeInCrypto’s latest crypto market analysis, click here.

Source: ethereum.today

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