Solana's 4.39% Price Decline to $19.91: Key Takeaways for September 1, 2023

Solana's price has seen a significant 4.39% decline over the past 24 hours, falling from $20.81 down to $19.91 as of September 1, 2023. This downward price movement brings Solana's market capitalization to $8.12 billion, making it the 9th largest cryptocurrency by market cap.

In this technical analysis, we will explore key metrics from Solana's recent price action and market data to better understand the drivers behind this price decline. Additionally, we will look at Solana's price trends over the past month and year to identify any significant support or resistance levels that could impact future price movements.

Breaking Down the Data Behind Solana's Price Decline

Over the past 24 hours, Solana's trading volume came in at $354.99 million, suggesting reasonable liquidity for SOL across exchanges. The price declined steadily over the past day, with some short-term fluctuations but an overall 4.39% drop from the previous day's high of $20.81.

Zooming out further, Solana has also seen declines of 3.95% and 14.58% over the past 7 days and 1 month respectively. Over the past 6 months, SOL has seen even greater losses of 11.67%.

This indicates that Solana has been in a sustained downtrend over the past few months, with selling pressure driving prices lower. The recent 24 hour 4.39% drop accelerates this downward momentum.

Looking at Support and Resistance Levels

Looking at the price chart, initial support appears to be around the $19 level where the price is currently bouncing. This also lines up with the May 2022 lows. Below current levels, additional support may exist around $17 which marked the July 2022 lows and a key support level this summer.

If selling pressure continues to mount, Solana could revisit the $17 level in the coming weeks. For SOL to reverse momentum and turn bullish again, it will need to break above short-term resistance around $22 and then the stronger resistance at $26 which marked the June highs.

Price Prediction for Solana Over the Next 6 Months

Given the sustained downtrend Solana has seen over the past 6 months coupled with the bearish sentiment across the broader crypto market, my prediction is that prices will continue to face downside over the next 6 months.

I expect Solana will likely revisit the key $17 support level, and a break below this could open the door for a steeper sell-off towards $14 or lower. To change this bearish outlook, SOL will need to reclaim the $22 and $26 resistance levels to signal a potential trend reversal.

Upside for SOL in the near-term will likely be limited given macro conditions. Continued rate hikes from the Fed and risk-off sentiment could weigh on speculative assets. However, for long-term investors, accumulating SOL around key support levels could pay off significantly in the years ahead when sentiment ultimately shifts bullish again.

Should You Buy Solana After This Recent Decline?

Solana has seen its price decline significantly from its all-time highs. However, at current levels the cryptocurrency could still have room to fall further if $17 support is broken.

Dollar cost averaging can help mitigate risks around buying SOL at current levels. For investors with a higher risk tolerance, building a position in small increments near support levels between $17 and $19 could pay off long-term. But investing significant capital all at once now does carry considerable risk if SOL breaks below key support levels.

Proper risk management such as using stop losses is recommended if buying SOL in the current conditions. Ultimately, Solana still has major long-term growth potential as an innovative blockchain network. But in the short-term downside risks remain elevated.

Is Solana Expected to Recover to New Highs in 2023?

Given current market conditions, it is unlikely Solana will recover back to its all-time high near $260 in 2023. For SOL to reach new highs again, several factors need to align:

• The macroeconomic environment will need to stabilize and turn favorable for risk assets again. This could take well into 2023 or longer.
• Positive developments and adoption for Solana's blockchain network need to continue growing to support increasing demand for SOL.
• Technical resistance around $100 needs to be broken before a return to all-time highs is possible. This implies substantial upside from current prices.

Realistically these stars aligning to enable Solana to print new all-time highs by end of 2023 seems improbable. But 2024 or beyond, after this crypto bear market concludes, Solana reaching new highs is certainly feasible. Its long-term growth outlook remains positive despite recent price weakness.