Solana Price Prediction: Descending Price Channel Raises Odds of a Drop to $60

Solana (SOL) has dipped by 10% in the past 30 days after breaking a key trend line support. This correction could be the beginning of a stronger move downwards, as on-chain signals seem to be piling up.

Thin volumes indicate low interest in this token, as market sentiment toward cryptocurrencies, especially altcoins, continues to be heavily depressed.

A challenging macroeconomic backdrop is keeping a lid on short-term rallies, while geopolitical tensions in the Middle East continue to support a risk-off attitude among investors.

Net inflows to Solana ETFs reflect investors’ lack of interest for the token right now, as these vehicles booked a meager net inflow of $14.6 million in July. Meanwhile, in June, they saw a net outflow of $800,000.

Solana On-Chain Metrics Send Sell Signal as Network Usage Drops

We have been tracking an on-chain signal that uses the network’s daily active users to predict big price moves. Recently, we saw a crossover between the 30-day and 50-day moving averages that has preceded strong moves in the price of SOL in the past.

This increases the odds of a pronounced correction in the near term, as it indicates that network usage has plummeted.

Meanwhile, August has started at a slow pace for other on-chain metrics as well, as DEX volumes and app fees appear to be lining up for a decline compared to July’s figure.

Last month, DEX volumes retreated by 9% to $51 billion while app fees rose slightly from $186 million to $200 million. A simple run rate of this month’s activity thus far resulted in a projected total of $44 billion while fees could increase by 10% to $220 million.

Solana Valuation Multiples Have Shrunked Compared to 2024

Solana’s positive momentum as a project has weakened dramatically compared to previous cycles when compared to its on-chain activity and network usage levels.

For example, back in 2024, the token traded between $130 and $180 even though DEX volumes and app fees sat at levels that are similar to this year’s. This indicates that the market has lowered its valuation multiples for the project at a point when capital is rotating to other, supposedly more promising, areas of the tech space like AI and space travel.

In 2024, Solana closed the year with $662 billion in DEX volumes and total app fees of $2.55 billion. The price of the token back then rose to $190.

This year, DEX volumes will likely come close to the $1 billion mark while app fees could close at $2.8 billion. Nonetheless, the price of the token stands below $80 and seems to be heading downwards after a bearish trend line breakout.

Heading to the daily chart, we can see that the token has formed a bearish descending price channel that could result in a retest of the $68 support.

In a previous Solana price prediction, we outlined a short position that could yield a 3x risk-reward ratio if the price dips to $60. Right now, that position is in positive territory.

The Relative Strength Index (RSI) currently sits at 44, just inches away from sending a sell signal if it dips below the 40 mark.