Solana Price is Hanging on a Thread as Crypto Fear and Greed Index Falls

Key Insights

• Solana price dropped to its lowest level since May 6 this year.
• The Crypto Fear and Greed Index has dropped to 43.
• The coin has formed a bearish flag pattern, pointing to more downside.

Solana price dropped in the past two consecutive days, moving to its lowest level since May 6 this year. It has retreated by 12% from its highest point this month, and may be at risk of more downside as the Crypto Fear and Greed Index continues its strong downward trend.

Solana Price at Risk as Crypto Fear and Greed Index Falls

One potential risk for Solana price is that investors are getting fearful as risks rise. For example, data show that US consumer and producer inflation continued to rise, with the headline Consumer Price Index (CPI) and Producer Price Index (PPI) rising to 3.8% and 6%, respectively.

There are also fears that the Iran war will restart soon after President Donald Trump announced that the ceasefire with Iran was on a “massive life support.”

Such a move will push crude oil and natural gas prices much higher in the near term. This is one of the top reasons why the Crypto Fear and Greed Index has plunged to the neutral point of 43 from the April high of 61.

In most cases, cryptocurrencies tend to underperform the market when the Fear and Greed Index is in a strong downward trajectory, as this normally pushes them to safe-haven assets.

Key Solana Metrics are Deteriorating

Solana price could be at risk of a strong downward trajectory as some major metrics start deteriorating. One of these metrics is the ongoing futures open interest, which dropped to $5.9 billion on Saturday from this week’s high of $6.7 billion. The falling open interest is a sign that demand in the most active market in the crypto industry is falling.

Meanwhile, more bullish traders are being liquidated as the ongoing Solana price weakness has caught them off guard. Solana positions worth over $14 million were liquidated in the last 24 hours, after another $20 million were wiped out in the previous session.

More data shows that Solana’s network is not doing well this year. For example, data compiled by DeFi Llama shows that the number of transactions dropped to 2.23 billion in April this year from 2.6 billion a month earlier. These transactions now stand at 1.117 billion this month.

Most importantly, Solana’s chain fees have continued to fall as transactions on the network have fallen. Its chain fees dropped to $15.2 million in April from last year’s high of over $241 million. It has been in a downward trend since January this year.

The same is happening across its ecosystem, with total value locked (TVL) on its network continuing its strong downward trend. Also, the volume of stablecoin transactions has continued falling.

Still, on the positive side, Solana ETF inflows have held quite well this month, rising by over $97 million from last month’s $38 million.

Solana Price is Hanging on a Thread

The daily chart shows that the SOL price peaked at $97.5 earlier this month. This was a notable resistance level as it coincided with the highest swing on March 16 this year.

The token has remained stubborn below the 100-day and 200-day Exponential Moving Averages (EMA).

There are signs that the coin is forming a giant bearish flag pattern, which is made up of a vertical line and a horizontal channel.

Therefore, the most likely Solana price prediction is bearish, with the next target to watch being the lower side of the channel at $77. A move below that price will point to more downside, potentially to the psychological level of $50.

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