Solana price forms a rising wedge amid weak on-chain metrics
Solana crypto price has been in a recovery mode recently.
Its DeFi total value locked (TVL) has dropped sharply.
Solana NFT transactions have been in a downward trend.
Solana price has been in a strong upward trend in line with the strong crypto rally. SOL jumped to a high of $24 this week as Bitcoin surged to a multi-month high of over $28,500. At its peak this week, the coin was up by about 50% from its lowest point this month.
Disappointing on-chain metrics
Solana and its ecosystem is not doing well even as the coin’s price has jumped in the past few days. First, data compiled by DeFi Llama shows that the total value locked (TVL) in Solana has plunged to about $252 million. At its peak, Solana was one of the biggest players in the industry with a TVL of over $12 billion.
Solana’s DeFi TVL crashed after the collapse of FTX, which was then the second-biggest player in the crypto industry by valuation. FTX had a stake in both Solana and other players in its DeFi ecosystem, including Serum. At its peak, Serum had a TVL of over $1 billion and was the biggest player in the ecosystem.
Other parts of Solana’s ecosystem are not doing well either. Earlier this year, SOL price soared after the launch of Bonk, a meme coin that sought to compete with Shiba Inu. Today, Bonk has flopped as its popularity waned.
Solana’s NFT ecosystem is also not doing well. In February, total sales in its NFT ecosystem came in at over $76 million, which was lower than January’s peak of over $158 million. In March, it has sold NFTs worth about $57 million. With just a few days to go, all indications are that March will be a weaker month than February.
Meanwhile, as shown below, the number of daily active Solana accounts has been in a downward trend. It stood at 116k on March 16, lower than the year-to-date peak of 243k.
Solana price prediction
The 4H chart shows that the SOL price has been in a bullish trend in the past few days. Along the way, the coin has formed a rising wedge pattern, which is a bearish sign. It is now slightly above the lower side of this wedge pattern. Solana remains slightly above the 25-day and 50-day moving averages and the 50% Fibonacci Retracement level.
Therefore, since the wedge is yet to reach its confluence, Solana price will likely retest its upper side at about $24 and then have a bearish breakout.
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