ambcrypto.com
1 h
Solana [$SOL] could risk further decline based on analysis from crypto analyst Joao Wedson, referencing the asset’s previous midterm election performance.
$SOL is currently underperforming, with the asset down approximately 20% in the past 30 days. The midterm analysis, according to the data provided, shows that $SOL tends to underperform one year after midterm elections before gradually gaining momentum.
This pattern was observed between 2022 and 2023.
Point your phone camera to install
4.8 based on 40K reviews in the App Store and Google Play
A similar outlook could see $SOL drop further from its present level, creating new local lows as investors exit their positions.
While the fractal provides insights into possible market performance, analysis of the liquidation heatmap shows a major possibility of the asset witnessing a significant decline, as there are clusters below the price.
Liquidation clusters below the price often act as magnets that pull prices towards them. Presently, the clusters below the price are of significant depth, extending towards the $73 region on the chart.
The network’s performance remains critical and could be a sting in the tail for investors who may be accumulating the asset.
Artemis reports that there has been a decline in revenue and transaction activity on the network. The total revenue generated by the protocol fell from $1.3 million on October 6 to $442,000 at the time of this analysis.
Declining revenue is an impact of limited on-chain transactions, which Artemis confirmed have also declined across the network.
Transactions on Solana had fallen from roughly 163 million to 120 million at press time. Usually, when on-chain activity declines like this, it often translates to less demand for the underlying asset, which could weaken its price structure and overall outlook.
On-chain, however, there is still some possibility that users in the market have a firm outlook as they anticipate $SOL to perform decently. The Total Value Locked (TVL), which tracks deposits across the network, has remained nearly flat.
This suggests that users are neither seeing buying pressure outweighing selling pressure nor vice versa.
In fact, over the past 24 hours, Solana’s TVL rose 1% to $5.416 billion. Usually, a broader bearish outlook would force investors to move locked capital into more stable assets.
If investors are going to pull funds out of $SOL heading into the midterm elections, then understanding the positioning of U.S. investors through Exchange-Traded Funds (ETFs) is important.
The spot U.S. $SOL ETFs show that there has been a major capital outflow over the last five trading days, with total net flows recording -$71.48 million.
Overall, the total net assets of Solana ETFs remain at $1.4 billion. Given the scale of the recent sell-off, which represents roughly 5% of the total market capitalization, it remains worth noting that U.S. investors may likely sell into the midterm elections.
Solana risks further decline as historical midterm election patterns and liquidation clusters point to a potential drop towards $73.
Network revenue fell to $442,000, while spot $SOL ETFs recorded $71.48 million in outflows over five trading days.
