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  • Solana SOL Price Dip: Will Increased PumpFun Activity Lead to a Rebound?
  • News

Solana SOL Price Dip: Will Increased PumpFun Activity Lead to a Rebound?

vivian 3 October 2024
Solana coin in the middle
  • Solana (SOL) is nearing oversold territory with an RSI of 34.82, suggesting a potential price reversal, while increased activity on PumpFun hints at renewed user engagement that could positively influence SOL’s price.
  • If the RSI reaches oversold conditions and PumpFun continues to attract new coins, SOL could rebound to $162.

Solana (SOL) has caught the attention of investors recently with a 6% drop in its price over the last 24 hours. However, technical indicators and increased activity on Solana’s popular application, PumpFun, suggest that a price reversal might be on the horizon. This article delves into the factors that could influence SOL’s price trajectory in the near future.

SOL Approaching the Oversold Stage

Currently, SOL’s Relative Strength Index (RSI) stands at approximately 34.82, a significant drop from around 70 just fifteen days ago. This decline indicates a shift from a bullish phase to a more bearish outlook, characterized by increased selling activity. The RSI is a key technical indicator used to gauge the momentum and speed of price movements.

Typically, an RSI above 70 suggests an asset is overbought and may be due for a correction, while an RSI below 30 indicates it is oversold and could be primed for a rebound. With SOL’s RSI nearing the oversold threshold of 30, it signals that the coin might be reaching a point where selling pressure is diminishing and buyers could start stepping in.

PumpFun Activity and Its Impact on SOL Price

PumpFun, Solana’s major application, has seen a surge in activity recently, hinting at renewed user engagement that could positively influence SOL’s performance. Historically, significant surges in the number of tokens launched on PumpFun have been followed by substantial gains in SOL price.

In August, the number of unique tokens launched on PumpFun reached an all-time high of 20,465 but then declined to just 4,629 by mid-September. However, the daily number of new PumpFun tokens began climbing again at the end of September, reaching at least 13,000 per day between September 26 and October 1. This resurgence suggests that the Solana chain is attracting users once more, potentially boosting SOL’s price as increased activity often correlates with heightened investor interest and demand.

SOL Price Prediction: Potential Rebound to $162?

Solana is showing signs of a potential trend shift. Its short-term Exponential Moving Average (EMA) lines are nearing a crossover below the long-term EMAs, forming a pattern known as a “death cross.” This pattern suggests possible bearish momentum and potential price declines in the near future.

If this downtrend materializes, SOL’s price could test support levels at $133 or even $110. However, if the RSI reaches the oversold stage (below 30) and PumpFun continues to attract new coins, this negative trend could reverse. Rising interest in PumpFun might push SOL’s price back to $162, presenting a promising opportunity for investors.

Solana’s current technical indicators and increased activity on PumpFun suggest that SOL may be nearing a point of reversal. With the RSI indicating oversold conditions and PumpFun attracting renewed interest, SOL could potentially see a price surge in the near future. Investors should keep a close eye on these developments as they unfold.

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