Due to the decrease in active addresses and the RSI indicating overbought conditions, Solana's future price may experience fluctuations.
Solana's price has recently surged, creating significant excitement within the crypto community. However, the accompanying decrease in the number of active addresses paints a more cautious picture. This phenomenon, known as Daily Active Addresses (DAA) divergence, indicates a reduction in the number of users participating in transactions. This decline often signals a loss of investor interest, potentially leading to price adjustments.
As prices rise but active participation declines, traders may interpret this divergence as a warning signal. If the trend of decreasing active addresses continues, it may trigger a wave of profit-taking among investors, weakening Solana's recent bullish momentum.
Another layer of concern surrounds the Relative Strength Index (RSI), which currently indicates that Solana is in the overbought zone. Historically, this situation may precede market corrections, as traders often sell to take profits. If trading momentum changes, the excessive expansion indicated by the RSI may limit further price increases and lead to temporary declines.
Traders should closely monitor RSI levels, as if investor sentiment begins to decline, maintaining high index levels may increase the likelihood of price corrections.
Solana recently soared to a significant high of $215 and is currently stabilizing around $205. SOL must maintain above $200 to prevent further declines, with a target of the important support level of $186. If this threshold cannot be sustained, a larger correction may occur, jeopardizing recent gains.
If profit-taking occurs and the price falls below $201, it may soon drop further to $186. This aligns with historical patterns, where breaking key support levels often leads to sustained downward trends.
Conversely, if SOL successfully rebounds from the support level of $2000, it has the potential to rise to the next resistance level of $221. Achieving this goal could not only reaffirm Solana's position as a market leader but also restore investor confidence and enhance the momentum required for sustained growth.
Although Solana has made significant progress, breaking above $200 and achieving a market cap of $100 billion, the current situation shows mixed signals. The decline in active network participation and the RSI being overbought indicate that investors should proceed with caution. Ultimately, whether SOL can stabilize above $200 and push towards $221 will be crucial in determining its short-term trend and market sentiment.
SOL has reached a key resistance level and requires a pullback to short near the intraday resistance level.
Short at 214 with a risk control of 3.5 points.
Target: 9-14 points $BTC
