Solana, one of the top altcoins behind Ethereum and the BNB chain, was not spared in the recent correction. After rising to US$210 in the first quarter of 2024, the currency is now sliding, facing strong headwinds, plummeting and following the performance presented by Bitcoin and Ethereum.
Is this the best time to buy Solana?
Even in the midst of this deep setback, macro analyst Raol Pal, he thinks This is the best time for investors and traders to consider Solana. In a post on X, Pal said traders may consider carrying the coin, citing the candlestick arrangement on the daily chart.
Looking at the SOLUSDT chart, it is clear that the coin is moving sideways and within a broader flag following the rise to over $200 in March. However, what is emerging amid the cooldown is that the $120-$125 zone is support to watch.
At press time, SOL is changing hands at around $130, down roughly 40% from the March 2024 highs. If the late May 2024 bears persist, it will be interesting to see how prices react at this level.
Based on Pal’s position, the analyst expects prices to recover from this level and resume last year’s upward trend. The problem is that there will be no guarantee that prices will rise from this support zone.
Technically, a close above $190, and ideally $190, could mark the resumption of the next leg higher, crushing the bears.
On-chain activity slowing as Ethereum prepares for more institutional support
Whether that will happen in the coming weeks or months is unclear. SOL’s performance is mainly linked to market developments and network activity, among other factors.
Although Solana is quickly emerging as the preferred choice for meme coin issuers, there has been a sharp drop in activity on the network in recent days. Notably, Ethereum layer 2 solutions like Base, Arbitrationand optimism seems to be taking over.
Solana offers greater scalability than Ethereum, which means transaction fees are low. When activity on the network drops relative to other cheaper platforms, it could mean that demand for SOL is falling, which is negative for prices.
At the same time, the recovery in the stock market, which has seen the recovery of indices such as the S&P 500, could draw investors’ attention to cryptocurrencies. Furthermore, with the United States Securities and Exchange Commission (SEC) set to approve a spot Ethereum exchange-traded fund (ETF), more capital will flow into ETH.