The Solana ecosphere, unsurprisingly, is also suffering as a result of the current market contagion. Solana fell to its lowest performance in recent weeks.
CoinGecko reports that its native token Solana has dropped in value by 58.3 percent over the course of a month.
Here’s a quick glance at how the token has been performing:
Solana experiencing high volatility and low return on investment
An ascending triangle with a hint of a bearish break is noted
Solana NFT will be released in the third quarter.
As a result, the risk and volatility of SOL are not showing signs of any improvement just yet and has in fact grown to 259 percent combined. Right now, according to Messari, SOL has a volatility of 2.08, which is its all-time high in that category, and a Sharpe’s ratio of -3.67.
When the value of the latter is negative, it indicates that the return on investment (ROI) from purchasing and holding SOL is so low that doing so could result in a loss.
Despite this, the coin’s value has been rising on a daily and weekly basis. Even though market sentiment is very negative, SOL’s market cap domination is increasing. Is SOL showing signs of improvement?
Solana Glow Fading?
SOL is currently in a weak position. Previous price moves lead to the construction of a rising triangle, which is a bearish pattern. With a Pearson’s R-value of 0.7235 for the regression channel, greater suffering may be anticipated.
At $13.97, which is the middle band of the Bollinger band, the coin was rejected. The Bollinger band appears to be approaching its breaking point. This would inevitably drive the price down below SOL’s current support level of $13.10.
With a bearish crossover, RSI values also confirm the upcoming decline. In addition to confirming the present price trend, the money flow index gives the bears further strength. The EMA ribbon is also bearish as it prevents further upward movement.
With SOL’s volatility and Sharpe’s ratio at all-time highs, a move below $13.10 and a possible short-term break of the 78.60 Fib level is possible.
Bearish But Yet Acceptable
Despite extremely negative market conditions, SOL’s NFT market domination and market capitalization have increased.
As of this writing, SOL’s market cap has decreased from yesterday’s 0.62 percent to today’s 0.61 percent, but this is still a positive sign for the future.
Despite this, investors and traders should be cautious with SOL and monitor the market condition. Currently, a short position at the current market price would generate profits for investors and traders.
SOL total market cap at $4.9 billion on the daily chart | Featured image from Business 2 Community, Chart: TradingView.com