TLDR

• Solana’s native token, SOL, hit a four-week low on June 11, testing the $145 support level.
• Macroeconomic uncertainty and mixed economic signals have contributed to SOL’s underperformance.
• Despite the recent decline, indicators suggest that investor confidence in SOL remains intact.
• SOL derivatives and the Solana network have remained stable, indicating market resilience.
• The Solana Foundation is working to mitigate the impact of maximum extractable value (MEV) on the network.

Solana’s native token, SOL, has been facing challenges amid macroeconomic uncertainty and network issues.

On June 11, SOL hit a four-week low, testing the $145 support level after a sharp 15.8% decline over four days. This underperformance comes as investors remain cautious about the broader cryptocurrency market and the potential for a stock market correction.

The U.S. Federal Reserve’s mixed economic signals have contributed to the uncertainty, with traders now seeing a 48% chance of interest rates remaining unchanged until September, up from 39% a month ago.

The upcoming release of the U.S. inflation data on June 12 is expected to have a significant impact on the market, with some analysts warning of a potential broad market selloff if the Consumer Price Index (CPI) increases above 0.4% compared to the previous month.

Despite the recent downturn, several indicators suggest that investor confidence in SOL remains intact.

The demand for leverage through SOL futures has remained stable, with the funding rate holding steady at 0.01% per eight hours since June 8. This stability in the face of a significant price drop indicates market resilience and suggests that bulls are not over-leveraged.

On-chain data from the Solana network also shows an increase in user numbers and transaction volume. While some analysts believe that Solana’s low fees may encourage data manipulation, this issue is not unique to Solana and affects other platforms as well.

Solana currently ranks as the fourth-largest blockchain in terms of 24-hour active addresses interacting with decentralized applications (DApps).

The Solana Foundation has been working to address network issues, particularly those related to maximum extractable value (MEV).

Validators on the network were found exploiting traders through sandwich attacks, manipulating transaction prices for profit at the expense of retail investors. In response, the foundation has excluded these validators from its delegation program, aiming to reduce incentives for such detrimental actions.

As SOL consolidates and seeks to find solid ground, the potential for a short-term recovery remains. If SOL can clear the $152.50 resistance level, it may set the stage for a more significant increase.

However, failure to rally above this resistance could lead to further declines, with support levels at $145, $142, and $135.

So while SOL has faced challenges in recent weeks, the underlying stability of the Solana network and the resilience of investor sentiment suggest that the token may have the potential to reclaim higher price levels once market conditions improve.

The post Solana Network Stability & Investor Sentiment Provide Hope for SOL Recovery appeared first on Blockonomi.

from Blockonomi https://ift.tt/Ikqc0B4