Solana Price Forecast: SOL Losses $20B in April, is the Worst Over?

Solana (SOL) price dropped to 10-day low of $133 on Saturday April 27, bringing its weekly timeframe losses to 11.4%. On-chain data metrics reveals how a decline in new users joining the Solana network has emerged a critical catalyst behind the last week’s tepid performance.

Is SOL price in danger of another price downswing in the week ahead?

New-User Acquisition Rate has Declined 51%

The global crypto market has been stuck in a limbo since the April 20 Bitcoin Halving.

Similar to Solana, prices of ranked mega-cap assets including BTC, ETH, and DOGE have all declined considerably, as investors took a cautious stance to avoid possible downside from a potential post-halving crash.

But digging deeper, on-chain data shows that a unique set of bearish catalysts could be in play in the Solana markets.

Chiefly, HelloMoon’s Daily Signer chart below tracks the number of new wallets that execute their first transaction on a given day. This essentially serves as a proxy for measuring the rate at which new users are joining the Solana blockchain network.

The Daily First Signers trend chart shows that Solana attracted 1.2 million new wallets on March 29. But it curiously, it has been downhill since then. The latest day on April 28 reflects that 608,298 SOL wallets signed executed their first transaction, marking a 51% decline from figures recorded 30-days ago.

Solana Market Cap Shrinks $20 billion amid New-User Dearth

It appears that Solana’s remarkable network growth in Q1 2024 was fueled by a flurry of investors aping-in on the memecoin rave.

But following multiple network outages and euphoria surrounding Solana’s memecoins cooling off, the new-user acquisition rate has been in a steady decline over the past month.

Typically, a decline in new-user acquisition can have an accelerated bearish impact on price action during high sell-off periods, as the underlying asset struggles to attract new demand.

With SOL price down 34% during over the last 30-days, and market cap dwindling by $20 billion, the impact of the 51% decline in new-user activity has been quite evident.

SOL Price Forecast: Bears Eyeing $125 Reverse

Solana (SOL) price dropped to 10-day low of $133 on Saturday April 27, bringing its weekly timeframe losses to 11.4%. In terms of short-term forecast, a further escalation of the 51% decline in new-user activity could see Solana price slide below $140 in the days ahead.

In further affirmation of this bearish price forecast, the lower-limit of the Bollinger Band indicator suggests SOL could drop as low as $125 before finding a steady support cluster.

But on the contrary, after 34% decline over the past month, if fatigue sets in among SOL sellers, bull could attempt to stage a $150 retest. However, as depicted above, an short-term price recovery efforts could be thwarted by the looming sell-wall at the 20-day SMA price of $146.