Solana (SOL) Sees a 5% Price Drop, Dipping Below $55: What Comes Next?

Solana Price Correction

Although the Solana price moves sideways, analysts are bullish about SOL hitting three digits by the next year of 2024.

Ethereum Layer-1 competitor Solana has been on a downward trajectory ever since hitting its 2023 high of $68.21 earlier this month in November. The Solana price has corrected a further 5% over the last 24 hours slipping under $55 as of press time.

Solana Price Trending Downwards

The Solana price has come under pressure amid the broader market sell-off with Bitcoin and altcoins both heading lower. Amid today’s price correction, SOL has dropped under its 10-day exponential moving average (EMA) at $56.53, indicating that bears are taking the upper hand over the bulls.

The good thing is that the Solana price is still trading above its 50-day and 200-day EMAs of $43.25 and $29.51. As reported by CoinGape, the SOL price has encountered multiple pullbacks during its continuous uptrends, often retracing to either the 38.2% or 50% Fibonacci levels.

As of now, Solana’s coin is priced at approximately $57. The potential for a bullish resurgence exists as long as it holds above the 50% Fibonacci level, situated around $42. If the bullish trend resumes, there is a possibility of prices ascending towards targets of $78.2, followed by $100 and $121.75.

Crypto Analyst’s Perspective

The crypto analyst using the X handle @AltcoinSherpa expresses a bullish sentiment toward SOL. After assessing the SOL price trend, the analyst anticipates a correction, suggesting that an entry point below $50 would be favorable. As per @AltcoinSherpa’s analysis, the SOL price is most likely to reach triple digits in 2024.

SOL Whale Transactions and Address Activity

Marouane Garcon, one of the co-founders of The Real-World Asset Exchange, a perpetual futures exchange, adopted a distinct approach in his analysis by concentrating on the influence of significant traders. Citing data from Whale Alerts, Garcon further stated:

“Solana’s price drop can be attributed largely to whale movements. Over 2.1 million SOL was transferred in just three transactions, signaling major selling ahead. This spooked retail investors into selling out of fear.”

While the precise motives behind recent token transfers remain undisclosed, some deductions can be made based on their destinations. The initial two transactions involving transfers to unfamiliar wallets might indicate over-the-counter (OTC) activities conducted beyond crypto exchanges.

The latest transaction, indicating a move toward a cryptocurrency exchange, particularly Coinbase, could imply a selling action, a common reason for tokens being transferred to exchanges.

Additionally, Solana’s active addresses have witnessed a major uptick. Based on on-chain data reported by ‘The Block,’ the count of active addresses has surged to a six-month peak of 444.48k. This increased number of active addresses signifies a rising interest and engagement within the Solana ecosystem, reflecting sustained demand for SOL tokens in the foreseeable future.