Is This The Best Time To Buy Solana (SOL)?

Solana, one of the top altcoins, trailing Ethereum and the BNB Chain, has not been spared in the recent correction. After rallying to as high as $210 in Q1

Top altcoin Solana (SOL) has not been spared in the recent correction, even as the coin rallied to new 2024 highs of $210 in Q1.

Now sliding and following the performance posted by Bitcoin (BTC) and Ethereum (ETH), Solana is facing strong headwinds, plunging from the late May highs.

But as the altcoin posts double-digit losses in the past 24 hours, macro analyst and former Goldman Sachs executive, Raoul Pal, thinks this is the best time for investors and traders to consider Solana.

In a post on TradingView, the analyst shared his thoughts on the price action, highlighting a key support level.

Raoul Pal Tips Solana For Best Entry Point, But…

In his post, Pal pointed out the candlestick arrangement in the daily chart, suggesting that traders may want to consider loading up on Solana (SOL) at current price levels.

“Everyone is looking at the wrong chart. This is the chart that matters. Looks like the best entry point for traders. Even I might have to load up on some SOL here.”

After spiking to over $200 in March, the coin moved sideways and inside a broader flag. However, what’s emerging is that the zone between $120 and $125 is a crucial support level to watch.

At press time, SOL is changing hands at around $130, down approximately 40% from the March 2024 highs. If bears press on, it will be interesting to see how prices will react at this level.

From Pal’s position, the analyst expects prices to bounce back from this level and continue the uptrend from last year. The problem is that there’s no guarantee that prices will shoot higher from this support zone.

Technically, a close above $190 and preferably $190, could mark the resumption of the next leg up, quashing bears.

Solana On-Chain Activity Shrinking As Ethereum Set For More Institutional Support

Whether this will pan out in the coming weeks or months is unclear. But how SOL performs is primarily tied to market developments and on-chain activity, among other factors.

While Solana is fast emerging as a preferred choice for meme coin issuers, there has been a marked drop in on-chain activity in recent days. Notably, Ethereum layer-2 solutions like Base, Arbitrum, and Optimism appear to be taking over.

Solana offers higher scalability than Ethereum, which translates to lower transaction fees. When on-chain activity drops relative to other cheaper platforms, it could mean the demand for SOL is falling, which is a net negative for prices.

At the same time, the revival in the stock market, which has seen indices like the S&P 500 rally, could draw investors’ attention to cryptocurrencies.

Moreover, with the United States Securities and Exchange Commission (SEC) on the brink of approving a spot Ethereum exchange-traded funds (ETF), more capital will flow to ETH.