Solana Price News: SOL Flashes Sell Signal as On-Chain Revenue Drops to Multi-Year Low

Solana (SOL) has dropped by 16% in the past 30 days and recently formed a technical pattern that could set the stage for a strong downturn.

Trading volumes have jumped by 14% in the past 24 hours, rising to $4.2 billion. This figure accounts for more than 10% of the asset’s circulating market cap.

The macroeconomic backdrop in the United States has worsened as inflation skyrocketed and has now doubled compared to the U.S. Federal Reserve’s target rate.

This has put significant pressure on the price of cryptocurrencies, as risky assets tend to suffer the most when market conditions deteriorate.

Lower liquidity due to higher financing costs and pessimistic sentiment creates room for further downside. In addition, on-chain metrics suggest that network usage has declined significantly.

Solana Revenues Drop to Lowest Level Since December 2023

According to data from Artemis, Solana’s weekly revenues have declined to their lowest level since December 2023. Last week, revenues dropped to $2.9 million during the week ended on June 14.

Comparatively, weekly revenues have ranged between $5 million and $10 million throughout the year.

This recent drop implies a decline in on-chain activity, which tends to be the norm during bearish cycles.

On the other hand, daily active users (DAUs) have spiked to their highest level since March 30. This could indicate two things:

1. SOL holders are actively transferring assets out of exchanges and into Solana addresses for cold storage, which is bullish.
2. SOL holders are starting to move assets out of cold storage and into centralized exchanges, as they are preparing to dump SOL in the next few days through more liquid venues.

DEX volumes are also heavily depressed, as per data from DeFi Llama. At the beginning of February, weekly volumes stood at around $20 billion. As of last week, they shrank by 50% to less than $10 billion.

Meme coin trading is an important segment that drives Solana’s network usage. However, traders’ interest in this activity has been severely impacted during this bear market.

Hence, as on-chain activity remains heavily depressed, the odds of a sustained drop for SOL are quite high.

Solana Could Dive to $50 If Bearish Momentum Accelerates

Heading to the daily chart, we can see that SOL made a double top at $75. This is a bearish pattern that could result in a significant drop. Confirmation of this pattern would come if SOL drops below $70 once again.

The most likely target would be $61 if bearish momentum accelerates. However, our mid-term target for the token is $50.

A bearish breakout of Solana’s long-dated consolidation is what makes this drop highly likely. The Relative Strength Index (RSI) is currently sitting at 48. A drop below 40 should be considered a sell signal at this point, as it would mean that momentum has turned bearish once again.