Solana's SOL Token Faces Headwinds Amidst Bybit Hack and Deteriorating On-Chain Metrics

Solana, a high-performance blockchain platform, has been facing headwinds recently, with its native token SOL experiencing a decline in price and on-chain metrics. The recent hack of the Bybit exchange, worth approximately $1.5 billion, has exacerbated the situation, strengthening resistance levels and triggering a drop in price. Low network activities and declining on-chain metrics suggest that SOL price may face further challenges in breaking through resistance levels.

Despite the recent setbacks, there have been positive developments for Solana. Franklin Templeton has filed for a new exchange-traded fund (ETF) that aims to track Solana's spot price, indicating growing interest in SOL. However, the positive momentum has not been enough to offset the deteriorating on-chain metrics. According to data from The Block, the number of transactions on the SOL network has decreased, and there has been a significant decline in active addresses.

The downward trend in key on-chain metrics suggests increasing bearish control for Solana. As network activity weakens, the volatility rate for initiating an upward rally diminishes. Additionally, the SOL price may face further bearish pressure as short positions increase. Data from Coinglass shows that the long/short ratio has dropped, indicating that a significant portion of total trades are in short positions.

The crypto market's recovery has led to a strong correction in the SOL price following the Bybit hack. Buyers are pushing the price above immediate Fib levels to continue the upward momentum. As of writing, SOL price trades at $173, surging over 2.8% in the last 24 hours. However, the SOL/USDT trading pair continues to struggle below $180, indicating strong domination from the bears. This price level could be a major obstacle as short-term holders (STHs) might continue to liquidate here. If the price falls below the EMA20 trend line on the 1-hour chart, sellers will likely try to push it back down to the $160 support level.

However, with the RSI level continuing to trade around the midline, it might trigger a retest of the resistance channel. If the price manages to hold above $180, it would favor the buyers. The trading pair could then increase to $220. As the crypto market continues to evolve, investors and traders will closely monitor Solana's on-chain metrics and price action to determine the next move for SOL.