Though Bitcoin lost more than 10% in January’s first week, it is not the only digital token that seemed to start the year on a ‘wrong’ foot. Solana, one of 2021’s best performers, appeared to undergo a somewhat challenging time.
The downbeat in the overall crypto space dragged SOL price down on the charts. That had the 5th ranked alternative coin testing the lows of $140 on January 8.
Downtrend Actions?
Solana has experienced drawdowns within the past week as far as its platform performance is concerned. Compute transactions reduced Solana’s capacity following an upward move. The network witnessed failed transactions, and developers stepped up to solve the issue. Nevertheless, the altcoin’s social sentiments appeared to drown.
Solana network capacity of about 50,000 every second (TPS) suffered after the platform noted surged high compute transactions. That, plus the crash by the global market, drove SOL down towards lower price zones. Meanwhile, Solana lost around 40% of its values within the past month.
Though SOL recorded somehow independent surges in August and September, the altcoin has seen its market sensitivity rising with time. As a result, Solana’s price has presented declines whenever Bitcoin encounter plunging catalysts.
On November 15, SOL had its price dropping by 17%. Moreover, the December 4 sudden crash saw the crypto losing nearly 28% of its value. Surprisingly, Solana declined again by 13% and 21% as December ended and January’s first week, respectively.
Remember, Solana touched its ATH on November 7 at $258. However, lower highs and lower lows saw SOL declining by more than 45% from its record highs. Furthermore, the asset’s RSI and price seem to venture into a long-term fall since the mentioned all-time high.
What Next
As SOL hovers at $140 lows, should you buy the dip or expect further bleeding from the coin? Indeed, the Solana price crash ruined its crowd sentiment. Market participants lost interest in the Solana project.
Meanwhile, SOL saw a significant on-chain volume surge after the latest dip. That corresponded with RSI’s near-term reversal. Meanwhile, SOL’s recovery weighted social sentiment. With that, the crypto can see further upside in the short term.
Moreover, Coinalyze data shows Solana’s Open Interest surged by around 2 – 3%. While writing this content, SOL price hovered at $144.82 with a recovery attitude, following a 3.25% 24-hour surge. With that, a Solana entry might be logical. For now, Solana appears to offer a lucrative risk-reward ratio and a high possible long-term ROI.