Solana Stablecoin Usage Surpasses Ethereum – SOL Price Still Rejected at $200

KEY TAKEAWAYS

• Solana stablecoin trading overtakes Ethereum’s significantly.
• SOL struggles at $200, faces potential downturn.
• MEV bots drive Solana’s trading volume surge.

In a remarkable turn of events, Solana‘s network has seen its stablecoin trading volumes soar past Ethereum’s. Despite this monumental achievement, Solana’s native token, SOL, faced a setback, struggling to break through the $200 resistance level.

After attempting to go above $200 today, April 1, we saw a rejection, causing a 5% fall to $194. Should this continue, SOL could go down further.

Stablecoin Trading on Solana Surpassing Ethereum

Recent data from Artemis reveals a significant surge in stablecoin trading on the Solana network, surpassing Ethereum’s activity throughout most of March. Beginning March 9, the disparity in daily trading volumes between the two blockchains widened. Solana’s volume peaked at $97.5 billion on March 30, notably higher than Ethereum’s $9.3 billion.

The gap reached its zenith on March 28, when Solana’s trading volume reached $112.9 billion, over five times Ethereum’s $17.6 billion. This activity positions Solana as the dominant player, accounting for over 80% of the market’s stablecoin trading volume.

Artemis attributes this massive volume primarily to the operation of MEV (maximum extractable value) bots and transactions on Phoenix, a decentralized crypto exchange active on Solana. MEV bots, designed to exploit profit-making opportunities by scanning the blockchain for lucrative transactions, have been particularly active on Solana.

Solana (SOL) Price Analysis

On March 18, the price of SOL reached a high of $210. Shortly after, it fell to $162 on March 20, decreasing by 21%. We saw a recovery from there. The price went on to form an ascending triangle, with April 1’s high of $200 being an interaction with its resistance.

As resistance was present, a rejection sent the price of SOL back to the level where the last upward move started. This is an early sign of weakness. The wave structure suggests the completion of an ending diagonal, meaning it could face a more significant downside.

The ascending triangle is wave five out of a higher degree five-wave impulse. If SOL makes a breakout below the ascending support, that will signal that it is headed for a lower low than on March 20.

Our first target would be the same length as the previous downfall, which is $160. However, if this is the start of a more significant downtrend, the 1.618 Fibonacci extension target at $130 would look more suitable.