Solana Price Faces Crucial Juncture: Will it Reverse to $120 – Can the Bulls Stage a Comeback?

Solana (SOL) has continued to decline over the past month, with over 27% decline in the last 30 days. This decline is attributed to the reduction in the number of users entering Solana's ecosystem.

Solana now trades at $134.89, with a nearly 5% price drop. This performance has raised questions among investors about whether SOL will continue to decline or if the bulls will return.

Following the Bitcoin Halving on April 20, the global crypto market has been in a state of uncertainty. Established cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE) have all seen notable declines.

However, Solana (SOL) appears to be facing similar challenges. A closer examination of on-chain data reveals potential reasons behind Solana's recent performance.

The frenzy surrounding meme coins fueled Solana's network expansion earlier in the year. Although, network congestion, transaction delays, and the dwindling meme coin frenzy have caused fewer new users to join in the last few weeks.

On March 29, Solana experienced a surge in new user adoption, with 1.2 million wallets created on the network. However, Yet, since then, there has been a noticeable downward trend.

The rate at which new users execute their first transaction (Daily First Signers) on the Solana network has plummeted. By April 28, only 608,298 new wallets had initiated their first transaction, marking a significant 51% decline within just a month, as mentioned before.

Also, according to Hellomoon's data, token millionaires have dropped from 310 to 196 in the last 24 hours. With SOL prices falling by 27% in the past month, it's clear that the decline in Daily First Signers has significantly impacted the network.

SOL's price has dropped by more than 11% in the past seven days and 4.43% in the last 24 hours.

Solana ($SOL) is trading at $136 with a more than $1.9 billion volume in the last 24 hours. However, technical indicators suggest a decline to $120 is imminent.

One significant indicator is the price movement towards the lower Bollinger Band line. This setup suggests the market is oversold, and the bearish trend might be extended. In this case, there's a high chance of the coin dropping to $120 soon.

Additionally, the MACD indicator also supports this bearish sentiment. The MACD displays red histogram bars, which indicate bearish momentum. However, if the selling pressure loses momentum, the Bulls might seize the opportunity to force a retest of the $150 price level.

Given the stiff resistance at $146 around the 20-day SMA, chances of a $150 retest are slim. Investors should be cautious, as Solana may experience further decline towards the $120 mark in the coming days.

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