Solana is encountering renewed challenges in maintaining upward momentum after initial signs of a potential recovery, as indications of decreasing demand and weakening bullish strength emerge.
Presently trading around $130, SOL is finding it difficult to overcome the $135 resistance threshold, preventing further advancement beyond its recent price level.
Concurrently, the broader market landscape is displaying a more cautious stance with a reduction in risk appetite among investors, casting a shadow of uncertainty over Solana’s near-term trajectory.
Solana Fails $135 Resistance as Demand and Velocity Decline
As market participants increasingly favor assets perceived as more dependable, doubts are being raised about SOL’s ability to regain its previous upward momentum, prompting speculation about a possible shift towards a prolonged phase of market consolidation.
A concerning signal of diminishing demand for Solana is evidenced by its velocity metric, which has receded to a five-month nadir.
Data visualizations reveal a synchronized sharp decline in both SOL’s price and velocity commencing in late February.
Current token circulation levels now mirror those observed back in October 2024.
Velocity, as a measure of how often a digital asset is exchanged, serves as a proxy for investor interest.
A decreasing velocity typically suggests waning investor engagement and diminished trading participation within the market.
This current state of market sluggishness implies a reduction in the eagerness of traders to actively engage with SOL, contributing to a generally pessimistic market forecast.
The absence of new infusions of investment and a contraction in trading volumes could potentially prolong Solana’s underperformance in the market.
For the time being, potential investors appear to be on the sidelines, awaiting more definitive market signals before committing capital, thereby hindering any significant recovery attempt.
Market sentiment at present remains characterized by caution, and without a compelling positive market driver, a reversal of the current trajectory may be challenging to achieve.
This zone of investor losses is perceived as a precarious situation, especially if the larger cryptocurrency market context continues to deteriorate.
Also Read: Solana Meme Coin Driven to Exploitation by KOLs and Cabals
