Solana Plunges to $73... Why Did the Price Collapse Despite Record Network Performance?

▲ Bitcoin, Solana/ChatGPT generated image ©

Solana (SOL) has fallen to the $73 level despite its strongest network performance ever, making the $70 support level a watershed moment that will determine further sharp declines or rebounds.

According to investment media outlet TradingNews on July 29 (local time), Solana traded around $73.16, down about 5% from its intraday high of $77 the previous day. On the 28th, it fell to $72.86, but buying interest prevented a further decline below $73. While the overall cryptocurrency market fell by about 2.75%, Bitcoin (BTC) recorded $63,300, down 2.67%. Approximately $600 million worth of leveraged positions were liquidated in the market, with long positions accounting for 87.88% of this.

Technical trends indicate clear weakness. Solana is trading below all its 20-day, 50-day, 100-day, and 200-day exponential moving averages of $76.85, $76.79, $80.99, and $94.82, respectively. The 4-hour Relative Strength Index (RSI) fell to 35.57, and the daily indicator showed 29.04, indicating an oversold region. Liquidation volumes are concentrated at $72.50 and $74, suggesting that volatility could increase if the price moves in either direction. In particular, if $72.50 breaks, $70 will immediately come under test.

In contrast to the downtrend, network metrics reached all-time highs. In Q2, Solana-based tokenized assets increased by 114% from the previous quarter to $5.77 billion, marking a new record for six consecutive quarters. Tokenized stocks quadrupled to $4.8 billion, with Solana accounting for approximately 97% of this market. Staking volume also increased to an all-time high of 427 million units, accounting for two-thirds of the total supply. Non-vote transactions reached 9.8 billion, and the quarterly trading volume of decentralized perpetual futures exchanges recorded an all-time high of $183 billion.

However, the deterioration of network profitability was identified as a key burden limiting price rebounds. In Q2, the real economic value decreased by 43%, application revenue by 31%, and Solana's share of overall blockchain revenue also shrank to 12%. The median transaction fee was only $0.0004, meaning that increased usage did not sufficiently translate into token value. Institutional funds also favored Ethereum (ETH). Over the week leading up to the 24th, $103.8 million flowed into Ethereum spot ETFs, whereas Solana spot ETFs recorded a net inflow of only $1.03 million on the 27th.

The short-term direction is expected to be decided between $70 and $80. If $70 holds, a retest of $77.50 is possible, but if it breaks, the risk of a decline to $65 and $63 increases. Conversely, if it recovers $76.79-$76.85 and breaks through the short liquidation zone of $78.50-$79.20, the upward trend towards $81 could accelerate. If the daily closing price exceeds $80, $100 and $120 open up as medium-term targets, but for now, the Federal Reserve's interest rate decision and the Alpenglow upgrade scheduled for August are analyzed to be key variables.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*