Solana Price Doubles as Network Activity Crashes: Analysts Warn of Bearish Divergence

Whereas Solana’s day by day energetic addresses dropped greater than 80%, the value of SOL nonetheless surged over 100%. This raises the query of whether or not SOL’s value rally is pushed by buying and selling sentiment moderately than fundamentals.

The article highlights analysts’ warnings about this divergence and the explanations behind it.

Solana’s Community Exercise Drops Sharply Over the Previous 4 Months

Maksim, founding father of Santiment, pointed out that regardless of the rising SOL value, community exercise—together with energetic addresses and community progress—has slowed.

Since Might, day by day energetic addresses have fallen from 6 million to simply 1 million, and community progress has additionally declined from 4.9 million to 1 million.

The accompanying chart reveals a traditional bearish divergence: value climbs whereas on-chain metrics transfer in the wrong way.

Maksim famous that traditionally, this sample usually indicators a pattern reversal and will function a warning for traders.

“Early information reveals acquainted patterns. Proper now, we’re seeing a traditional bearish divergence: value pushing up whereas community exercise lags. Traditionally, this usually indicators a pattern shift,” Maksim said.

Santiment’s report added that based mostly on historic information, such patterns often result in a pointy reversal, with a few 90% probability.

BeInCrypto additionally reported that Solana DEX traders have dropped by 90% over the previous yr, reflecting weaker demand for tokens within the Solana ecosystem.

Market Sentiment Towards SOL Stays Constructive

Regardless of falling community exercise, SOL’s value has climbed from beneath $100 in April to above $200, in accordance with BeInCrypto.

Merchants ignore unfavorable on-chain indicators and proceed shopping for SOL, anticipating additional value positive factors.

A number of high asset managers—together with Constancy, VanEck, and Franklin Templeton—not too long ago amended their Solana ETF filings with the SEC. Analysts estimate the likelihood of approval now exceeds 90%. Market forecasts suggest a Solana ETF may attract as much as $8 billion in inflows.

SOL has additionally change into a part of the wave of strategic crypto reserves. Public corporations similar to Sharps Technology, Artelo Biosciences, and Ispecimen have raised tons of of hundreds of thousands to construct strategic SOL reserves.

Regardless of weakening community exercise, these drivers might have supported SOL’s upward momentum within the spot market.

The publish Solana Price Doubles as Network Activity Crashes: Analysts Warn of Bearish Divergence appeared first on BeInCrypto.