Following a remarkable price increase from May 15 to 22, the Solana saw a sharp slump that has continued for several days. This is not all, though, as the altcoin’s chart shows both active bulls and bears. The charts could move in any direction over the next few hours, signaling a pivotal moment for the price of Solana.
Before the sudden decline, Solana had risen to a month-high of $187.39 to reach the March high. However, Solana is now back at its starting point.
In this blog post, let’s discuss why Solana’s price is continuously declining and whether it will rise or fall further.
Why Is the Price of Solana Dropping?
Following market reports of ETF approval from its largest competitors, Solana charts suggested a potential drop. The outcome also followed the Bloomberg analysts’ earlier claim that the SEC’s scant indications had increased the likelihood of Ethereum ETF approval to 75%. As a result, the price of Solana dropped even lower to $163.38. The price has bounced back from that low and is now trading at $169.70, with a $76,264,513,063 market capitalization. Nonetheless, fewer transactions have been made due to a 56% decrease in trading volume.
Solana PoS validators went on an un-staking binge when the Ethereum ETF was approved, unstaking 3.5 million Solana coins between May 20 and May 24. There are currently only 365.3 million staked SOLs, and those unstacked SOLs are valued at about $594 billion.
Based on historical data, a significant decrease in staking frequently causes short-term instability for Proof of Stake networks.
What Does Solana’s Future Hold?
Solana is in a correction zone as she recovers from the overbuying situation earlier this week. This price decline was brought on by Solana, which entered a selling pressure with the Ethereum ETF. However, with the token up 2.5% from yesterday, the price of Solana has begun to rise, and much more may follow as the market calms the excitement over the Ethereum ETF.
Leaders in cryptocurrency and businesses have also been talking about the Solana ETF, the largest cryptocurrency in terms of market demand, behind only Bitcoin and Ethereum. For the time being, Ethereum’s supremacy is affecting the price of Solana, and investors are supporting their actions to recover as much profit as they can out of concern for a future decline.
Finally, experts think Solana can lower its costs to reach the $216 goal in the coming days. A few technical indicators, such as the moving average convergence divergence (MACD), suggest a rally for the time being.
