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Solana price has reversed sharply this month, falling from a monthly high of $124.7. The decline has coincided with weakness in Bitcoin and other altcoins, including popular names like XRP, Binance Coin, and Ethereum. This SOL price prediction explores whether the token will resume its uptrend or extend its downward move.
Solana Price is Falling as Demand Fades
SOL token has slipped as signs of waning demand start. One reason for this is that investors are concerned about rising bond yields and inflation. Recent macro data from the United States showed that headline and core inflation remained above the Federal Reserve’s 2.0% target in August.
Inflation will likely remain above this target in the foreseeable future because of the rising energy prices, with diesel hovering near its all-time high. The soaring inflation has led to a surge in bond yields, with the ten-year rising to its highest level since 2002.
These yields have led to elevated concerns among investors, which partly explains the ongoing weakness in the crypto and bond markets.
Another sign of the fading demand is the ongoing performance of ETFs. Data compiled by SoSoValue shows that these ETF outflows rose by $3.7 million on Friday, with most of the outflows happening in Bitwise’s BSOL ETF. The fund now holds $1.2 billion in assets, making it the biggest in the industry. It is followed by Fidelity’s FSOL, Grayscale’s GSOL, and Morgan Stanley’s MSOL.
In total, these funds have shed over $29 million in assets this month, a major divergence compared to what happened in the previous three months. Solana ETFs added over $271 million in assets last month, much higher than the $193 million and $14.6 million they added in August and June.
Solana Futures Open Interest and Staked Solana Demand is Falling
The same trend is happening in other areas. For example, Solana’s futures open interest has dropped to $6.92 billion, down modestly from last month’s high of $7.2 billion. This figure is a sign that demand among leveraged traders has started to fall.
The amount of staked Solana has dropped a bit in the past few days. There are now 437 million staked SOL tokens, with the staked ratio falling to 68.7%. Earlier this month, the ratio was close to 70%.
On the positive side, Solana has some benefits that may boost its performance over time. It is working on the upcoming Alpenglow upgrade that will lead to improved speeds. That will make it one of the fastest layer-1 networks in the industry.
Additionally, Solana will benefit from gaining market share in the DEX industry. Data shows that DEX protocols in the platform have jumped to $74 billion in the last 30 days, much higher than Ethereum’s $44 billion. Base and Robinhood Chain handled over $30.3 billion and $43 billion, respectively.
Solana Price Prediction: Technical Analysis
The daily chart shows that the SOL token rebounded from $60 in June and reached a high of $124 earlier this month. It then pulled back and retested the important support level of $109, its highest point in August and the upper side of the bullish flag pattern.
The coin has now retested the upper side of the flag pattern. It has now remained above all moving averages and formed a golden cross pattern. Therefore, the most likely SOL price forecast is bullish, with the next important target to watch being at $124. A surge above that level will point to more gains towards the resistance level of $150.
