- SOL shed over half its value in Q1 amid macro uncertainty and declining DEX volumes
- Altcoin has attracted more institutional interest, but can it change SOL’s fortunes?
Solana [SOL] slipped briefly below $100 for the first time in over 12 months. Prevailing macro uncertainty had a hand in the downward pressure.
Additionally, the significant fall in Solana DEX (decentralized exchanges) volumes could exacerbate the price decline. In fact, according to Blockworks research, Solana DEX volumes fell by 50% in March to $97 billion from $193 billion in February.
Source: Blockworks
Solana’s top DEX volume segment, memecoins, also dropped from $60 billion to $26 billion over the past two months. The cool-off in memecoin activity capped demand for SOL for transactions across the ecosystem.
SOL’s price dropped 53% from $240 to $100 over the same period.
SOL attracts institutions
However, marginal buyers have been aping Strategy’s Bitcoin play, such as SOL Strategies.
A new entrant, Janover real estate platform, also announced plans to acquire Solana validators and create a SOL treasury strategy. The firm’s JNVR stock exploded by +800% after the SOL treasury update.
For its part, SOL Strategies had over 3M SOL (nearly $400M) staked across its validators. The firm’s March report indicated that it bought 24k SOL and held 267k SOL.
Such institutional demand could boost SOL’s value in the long term. However, the altcoin may be under the whims of the broader market sentiment in the short term.
Source: Deribit
On the Options market, traders were pessimistic about SOL crossing $150 in the first half of April. However, only 10% of traders expect the altcoin to hit $150 by the end of the month.
From a technical chart perspective, SOL seemed to defending the slopping trendline support. However, the daily chart RSI was yet to tap the oversold territory – A sign that sellers could still drag it lower.
Source: SOL/USDT, TradingView
As such, SOL could rebound from its press time levels. However, a further decline to $80 can’t be overruled.