Solana seems set to finish this month in the negative, breaking a four-year history of positive September outcomes.
A general downturn in market sentiment, coupled with on-chain metrics indicating a drop in network activity, could drive SOL’s price down as the month concludes.
Decline in SOL Network Activity, Negative Market Sentiment
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Historically, September has been favorable for SOL, yielding gains for the past four years. In 2021, SOL experienced a spike of 29%, followed by a steady increase of 5.38% in 2022. The growth intensified in 2023 with an 8.22% rise, and in 2024, a solid 12.5% increase was recorded.
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This year, however, is proving to be an exception, as SOL appears on course to end September lower, thus ending the winning streak.
Despite a strong start this month, SOL reached a peak of $253.51 on September 18 but has since declined approximately 17%, indicating increasing bearish pressure.
This decline results from diminishing bullish sentiment, primarily due to reduced user involvement in the Solana network.
As reported by Artemis, the total number of daily active addresses interacting with Solana-based protocols has dropped to 3.04 million for the month, a decrease of 25%.
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Daily active addresses signify the count of unique wallets actively participating in sending, receiving, or interacting with on-chain applications. A decline in this number indicates falling user engagement and diminished network activity, potentially lowering overall demand for the coin.
Technically, SOL’s dropping Relative Strength Index (RSI) on the daily chart confirms decreasing demand. Currently, this momentum indicator reads 40.54.
The RSI gauges an asset’s overbought and oversold conditions, with values above 70 indicating overbought status and below 30 showing oversold conditions.
At 40.54, SOL’s RSI falls into bearish territory, signifying that selling pressure is surpassing buying momentum. While an imminent capitulation phase isn’t likely, negative momentum may continue if bearish sentiment persists.
SOL Positioned for Negative September Close
If the downward trend continues, SOL may wrap up September below its recent highs. In such a case, its price could trend down toward $195.55. Should this support level fail, the coin’s price might drop further to $171.88.
Nonetheless, a sudden increase in network activity or a shift in overall market sentiment could alleviate losses and stabilize the price. With such a trigger, SOL could surge towards $219.21.
