Solana (SOL/USD) traded at half last week’s price with a seven-day loss of more than 50%. the greatest loss cryptocurrency In the top 100 categories, excluding the troubled FTX exchange. SOL is now trading at its lowest level since March 2021. Regardless of the magnitude, the cryptocurrency may further fall from various insights.
It is fair to say that the fall in SOL reflects the liquidity concerns of the collapsed FTX exchange. The apprehensions have caused widespread losses in the market, though SoL buyers have been hit hard. Data from Solana Compass suggests that the token entering circulation could lead to increased pressure on the SOL.
Solana Compass says an unprecedented number of SOL tokens are likely to be placed without stakes. Accordingly, 60,399,401 tokens worth an estimated $755 million were shown as “dormant”. As these tokens become immovable, the total supply of SOL tokens in the market will increase by 8.8%, adding further pressure.
Concerns about the increased supply of SOL come as Solana’s era 370 ends. “Era” refers to the period when rewards are earned and then issued. During this period, validators lock their tokens and unlock them when they expire. Unlocking is responsible for the big price crash. Technical signals are also indicating that there is another bearish move after the bulls have lost a key level.
SOL crashes after losing $28 support
Source – TradingView
On the weekly chart, the SOL is oversold (RSI reading of 31) and is on a free decline. The key level of $28 was broken, welcoming another bear market for the coin.
Should you buy SOL Dip?
SOL is currently without a break after falling below $28. The only price direction at the moment is down. token is not recommended purchase,
Possible support for SOL lies at $12, which is a potential decline to $25. Established long term support is at $3. As bear market persists, we cannot rule out SOL trading at single digit price.
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