The Solana price is up 4.3% during Wednesday’s U.S. market trading session. The bullish momentum followed the wide market relief rally as Bitcoin price showcased a sharp reversal from $56000. However, the short uptick does not confirm a downtrend bottom, and sellers renew bearish momentum at a higher price.
Here’s why Solana Price May Tumble to $50
Over the past six months, the Solana price has resonated within the $210 and $122 horizontal levels. This consolidation within huge price swings on either side signals no dominance from buyers to sellers to drive direction. However, with a broader market project and an extended correction in September, the SOL price challenged its multi-month support of $120, with a potential breakdown. Here are six reasons Why the Solana coin could drop to the $50 mark.
Declining Interest in Meme Coins Due to Bitcoin’s Decline
The broader crypto market is heavily influenced by Bitcoin, which has traded nearly sideways since March 2024. As the BTC price recently plunged to $56000, Memecoins faced a significant drop due to its volatile nature. The reduced interest in speculative tokens like meme coins directly affects Solana’s user engagement and trading volume. As fewer investors participate in meme-driven ecosystems, the Solana price may experience further downward pressure.
Tron’s SunPump Diverts Capital and Users
Tron’s recent SunPump initiative is a direct competitor of Solana’s meme coin generator Pumpfun and has significantly drawn liquidity away from the SOL ecosystem. Such an event where one protocol lures the user away from another with a better incentives program called Vampire Attract. The alternative Data shows that Solana’s daily network revenue dropped from $1 million to less than $500,000 following SunPump’s launch.
Ethereum’s EtherVista DEX Competition
Ethereum, the strongest rival of Solana, has recently launched a new decentralized exchange, EtherVista. The project offers customized token launch parameters and revenue-sharing incentives to take long-term liquidity providers. If Ethereum continues its dominance, the growth opportunity for Solana price may shrink, reducing the demand force.
Rise of Solana Killers Like SUI
Emerging blockchains like SUI are being touted as “Solana killers” due to their superior scalability, security features, and development frameworks. Moreover, the SUI blockchain’s recent endeavors for offline cryptocurrency transactions using radio waves could gain traction among developers and investors. Such development could create a competitive environment for other blockchains and snatch their user base.
Sui blockchain innovates with alternative methods, like radio waves, to enable offline #crypto transactions for unbanked communities, even those without internet access.
— Eye On Globe (@eyeonGlobe_) September 4, 2024
Increase in Crypto Scams and Exploits
Crypto scams and rug-pull events have always been troublesome experiences for blockchain users. Slorg, a Solana-based Jupiter’s Core Working Group member, has recently warned its 18.7k X (formerly known as Twitter) on how Scammers have found a way to burn tokens inside your Solana wallet. While his tweet shared a method to avoid such unfortunate events, these incidents could cast doubt on blockchain security and diminish investor confidence.
Scammers have found a way to burn tokens inside your Solana wallet
But with a little awareness you can avoid becoming their next victim.
(1/8) pic.twitter.com/wZoNhWAIp0
— Slorg (@SlorgoftheSlugs) September 3, 2024
Bearish Crossover to Drive Selling Pressure
Within two weeks, the Solana price plunged from $162 to $134— registering a 17% decline. The bearish turnaround signals the continuation of the consolidation trend within a range led by two downsloping trendlines.
The falling SOL price will likely trigger a bearish crossover between the 20- and 200-day Exponential Moving Average (EMA) in strengthening the seller’s grip over this asset. If the bearish momentum persists, the coin price could breach the bottom support trendline.
The Solana price prediction hints at a potential asset breakdown to $80, followed by $50 support.
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