Is there a good chance of “buying” SOL?
Although Bitcoin fell more than 10% in the first week of January, it isn’t the only cryptocurrency to have problems in the new year. In fact, SOL is the star of 2021, but it also seems inevitable that this rather bad time will come.
The general momentum across the market together pulled SOL’s price down. In fact, the altcoin tested at number 5 by market cap on Jan. 8 and the lower $ 140 region at the time of writing.
Over the past week, Solana Network’s performance has plummeted. As the number of high-computational transactions increases, the capacity of the network suffers. The network has seen a number of failed transactions due to inefficient developers. Remarkably, the social mood for this also seems to be waning.
After that, the capacity drops dramatically from typically around 50,000 transactions per second (TPS). Coupled with the dire situation in the market that put SOL prices into a free fall, posting a loss of nearly 40% from the previous month.
Although the SOL grew almost independently from August to September, the coin’s sensitivity to the market also gradually increased over time. In particular, the price of goes down every time BTC moves south.
After that, the December 4th flash crash dragged the price down almost 28%. Interestingly, SOL fell again by 13% and 21% in late December and the first week of January.
After SOL hit an all-time high of $ 260 on Nov. 7, SOL hit lower lows and lower highs as the price fell more than 45% against ATH. Additionally, price and RSI appear to be in a long-term downtrend since the above ATH.
With the price currently below $ 140, is this an opportunity to buy a dip or is the altcoin ready to plunge in price? The bearish SOL triggered the negative sentiment of the crowd. This simply means that it doesn’t have a very large market.
However, after the recent decline, the on-chain volume increased significantly. This coincides with a short-term RSI reversal. The recovery of the psychosocially weighted from its all-time lows could point to further growth in the short term.
In addition, according to Data von Coinalyze, SOL’s open interest in the futures and perpetual markets has increased by almost 2-3%. When the price recovers, traders should look for an entry point.
However, the Sharpe ratio has yet to climb above the -3.49 value at the time of writing.
Interestingly, for now, SOL appears to offer a good risk / reward ratio with less downside risk and a potentially higher ROI in the long run.
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