Trendline Broken, ETF Inflow Plummets...Is Solana (SOL) Retesting the $68 Support Line?

▲ Solana (Solana, SOL), Bear Market/AI Generated Image

Solana (SOL) has fallen 10% in a month after breaking key trendline support. The combination of decreased network usage and sluggish ETF inflows has raised the possibility of retesting the $68 support line.

According to FXEmpire, a financial market specialized media outlet, on August 7 (local time), Solana has fallen 10% over the past 30 days. Investment sentiment towards the cryptocurrency market, especially altcoins, has significantly contracted, and trading volumes have thinned. An unstable macroeconomic environment is limiting short-term rebounds, and geopolitical tensions in the Middle East are also strengthening investors' risk aversion.

Fund flows for Solana spot ETFs also showed a slowdown in investment demand. Net inflows in July amounted to only $14.6 million. In June, there was a net outflow of $800,000. Sell signals were also detected in on-chain indicators. Santiment's daily active user metric showed a crossover between the 30-day and 50-day moving averages. FXEmpire explained that similar signals in the past have preceded significant price movements for Solana.

Network activity also slowed down. Decentralized exchange (DEX) trading volume in July decreased by 9% to $51 billion. Application fees slightly increased from $186 million to $200 million. Simply extrapolating the activity rate in early August, DEX trading volume for this month is expected to be $44 billion, and application fees are projected to increase by 10% to approximately $220 million.

Analysis suggests that the market's valuation multiple relative to network activity has also decreased compared to 2024. In 2024, Solana traded between $130 and $180 even with DEX trading volume and application fees similar to this year's levels. Annual DEX trading volume was $662 billion, application fees were $2.55 billion, and the price rose to $190. FXEmpire predicted that this year's DEX trading volume could approach $1 billion and application fees could reach $2.8 billion. It analyzed that the valuation multiple applied to Solana has decreased as funds have shifted to other technology sectors such as AI and space travel.

In terms of technical trends, a bearish descending channel has formed. FXEmpire suggested the possibility of retesting the $68 support line, and previous analysis proposed a short position strategy with a 3x risk-to-reward ratio if the price falls to $60. This position is currently in profit. The Relative Strength Index (RSI) recorded 44, and analysis suggests that if it falls below 40, additional sell signals could be generated.

[Article Key Summary]

-Solana has fallen 10% in the last 30 days after breaking its key trendline, and network usage has also slowed.

-Solana spot ETF net inflows in July amounted to only $14.6 million, and DEX trading volume decreased by 9% to $51 billion.

-FXEmpire suggested the possibility of retesting the $68 support line if the bearish descending channel continues.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*