In recent weeks, Solana (SOL) has experienced a notable rebound, steadily rising amid growing optimism in the wider crypto market.
Nonetheless, changing investor behavior and a decline in participation indicate that sustaining this momentum may be challenging for Solana in the short term.
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Solana Investors Are Bearish
The number of new addresses engaging with Solana has fallen to a yearly low, reflecting decreasing enthusiasm from potential investors.
Despite short-term fluctuations, there are fewer new participants joining the network, implying that both retail and institutional confidence remains low. This lack of fresh capital could impede Solana’s growth in the near future.
Without an uptick in new addresses, Solana’s price may struggle to gain the necessary momentum to sustain a rally beyond $250. Weak on-chain growth typically precedes price stabilization or minor corrections.
The Chaikin Money Flow (CMF), a significant indicator of capital movements, also presents a troubling view for Solana. At the time of writing, the CMF indicates limited inflows from both new and existing investors.
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This suggests that liquidity is diminishing, which is a bearish sign for any asset striving to extend a rally.
For Solana, robust inflows are essential to maintain bullish momentum and prevent price exhaustion. Unless inflows strengthen, the network’s liquidity could continue to decline, putting SOL at risk for short-term corrections.
SOL Price Needs to Establish Support
Currently, Solana’s price is at $231, which is just below the $232 resistance. A breakthrough above this level could bring the token nearer to $250, marking a vital test for its bullish trajectory.
However, weak investor engagement and declining inflows indicate that Solana may struggle to reach this goal. A rejection at $232 could push the altcoin back toward $221, heightening bearish pressure.
If sentiment shifts positively and investors regain confidence, Solana could regain strength, surpassing $242 to approach the $250 target again. This would invalidate the bearish outlook.
