Solana price continued its strong downward momentum, reaching its lowest level since Oct. 11.
Solana (SOL), one of the top blue-chip cryptocurrencies, dropped to $138, down 53% from its highest level this year.
Oscillators indicate that Solana’s price has moved to its most oversold level since June 2023. The Relative Strength Index has dropped to 24, much lower than the greedy zone of 73. RSI is a widely used indicator that measures the rate of change of an asset.
Other oscillators show similar trends. The stochastic oscillator, which compares an asset’s closing price to its price range over time, has moved to the oversold level of 10. Additionally, the commodity channel index continued its downtrend this week.
An oversold period occurs when an asset drops significantly and may be due for a rebound. However, in some cases, an asset may continue falling even when it remains in the oversold zone.
Solana’s situation is further complicated by the formation of a death cross pattern, as the 200-day and 50-day moving averages have flipped. This pattern often signals further downside, which in this case may bring SOL to the psychological support level of $100.
Top Solana news driving its price action
There are several important Solana news that are impacting its price action. First, on-chain data shows that Binance has been selling its SOL holdings through Wintermute. Wintermute, an over-the-counter trading firm, has withdrawn $38 million worth of Solana from the exchange.
Second, Solana is scheduled to unlock 11.5 million tokens worth almost $2 billion as part of the FTX distributions. Token unlocks hurt a cryptocurrency by increasing the supply and diluting existing holders. Solana unlocks tokens worth over $5 million each day.
Third, the Solana meme coin ecosystem has crumbled, with its market cap falling from $25 billion last month to $8.8 billion. All prominent names like Dogwifhat (WIF), Fartcoin (FARTCOIN), and Popcat (POPCAT) have all shed billions of value.
Additionally, Solana’s network activity has declined, with the number of active addresses dropping. Weekly active users have fallen to 81.6 million, down from last year’s high of 135 million. The volume of DEX tokens handled by its protocol has also dropped by over 30% in the past seven days.
