Solana‘s price today dropped by 9.25%, reaching a two-week low of $168. This decline is part of a broader downturn in the cryptocurrency market, which saw an overall decline of 3.8% on April 5. So, what can be expected for Solana, which was trading at $175 at the time of writing? Let’s examine.
What’s Happening on the Solana Network?
Recent Dune Analytics data shows a significant increase in memecoin transaction failures on the Solana network. On April 4, more than 75% of non-voting transactions failed, indicating the highest failure rate observed. Helius CEO and Solana supporter Mert Mümtaz contested the narrative of a 75% transaction failure rate in an April 4 post, arguing that a large portion of these failed non-voting transactions were due to bot spam.
In other words, Dune Analytics data may not necessarily indicate a systemic issue with Solana’s functionality. However, rumors alone turned SOL into a low-performing player on April 5 compared to the rest of the crypto market.
Memecoin Projects Join the Downturn
The drop in Solana’s price coincides with sharp corrections in top memecoin projects like Bonk (BONK) and Dogwifhat (WIF). WIF and BONK dropped approximately 13.2% and 9%, respectively, in the last 24 hours. The most significant loser among memecoin projects was the newly launched Cat in a Dogs World (MEW) memecoin, which fell by 30% during this period.
The positive correlation with memecoin projects in the Solana ecosystem has strengthened recently. For example, the daily correlation coefficient between SOL and BONK was 0.83 on April 5.
Meanwhile, the daily correlation coefficient with WIF was around 0.53, highlighting these projects’ impact on Solana’s current market dynamics.
Solana Chart Analysis
From a technical analysis perspective, today’s price drop in Solana could be part of a pullback within the dominant ascending triangle range shown below. Ascending triangles in an uptrend are seen as continuation formations and suggest a high chance for Solana (SOL) to rebound from the formation’s lower trend line. This potential recovery could set SOL’s price on a trajectory towards the upper trend line of the triangle, targeting approximately $200 by the end of April, a 16.5% increase.
A decisive breakout could position SOL’s price at a primary upward target of $240. This level is measured by adding the maximum height of the triangle to the upper trend line. Conversely, a drop below the lower trend line of the triangle invalidates the continuation setup, risking a path for SOL’s price towards its 50-day exponential moving average (50-day EMA; red wave) around $160 by the end of April, a 9.5% decrease.
