The price of SOL has been declining for three consecutive weeks, but a considerable rejection of low prices suggests it will resume its upward trend. It must break through the resistance at USD 230.50 to confirm the control of the bulls, which is very likely.
In January, Solana (SOL) was trading at USD 1.51, and its market capitalization was about USD 86 million. Many people have invested in the relatively new cryptocurrency, which they consider a competitor to Ethereum.
The upward trend in the price of Solana has caused surprise due to the dramatic growth of its network. The following analysis intends to indicate how likely it is that it will regain that strong direction.
While writing this article, SOL is trading at around USD 208 and has accumulated a 0.2% loss in the last 24 hours. Its market capitalization is about USD 63.3 billion, which places it in 5th position in the cryptocurrency ranking, according to CoinGacko.
That network has great potential to scale and conduct transactions quickly and cheaply. For that reason, it is one of the best platforms for the development of decentralized finance (DeFi) apps.
Although Solana currently processes around 2,500 transactions per second, its potential is much greater. Its validation model, called proof of history, allows that network to process more than 50,000 operations per second.
That great potential could continue driving the growth of the network since users want cheaper and faster alternatives to Ethereum.
Technical Analysis of the Trend in the Price of Solana
The weekly chart indicates that the price of SOL has been declining for three consecutive weeks.
Last week, there was a strong rejection of low prices, which suggests a high probability that the value of Solana will soon resume its upward trend.
The price of SOL pulled back towards 50% Fibonacci, which may have been the bottom of the decline. Now momentum could drive the value of the cryptocurrency to USD 300 (-27% Fibonacci).
The bullish scenario is the most probable if the price of Solana continues to reach increasingly high lows.
Daily Chart of the Price of Solana in the Last Week
This period reveals that there is still a short-term bearish bias in the value of the Solana cryptocurrency.
However, the price of Solana recently respected support close to USD 195.70. As the dominant force is bullish, the short-term trend will possibly pass to buyers soon.
The price of Solana must break through the resistance at USD 230.50 to confirm that the bulls have regained control. Everything seems to indicate that there is a high probability that this will happen soon.
If the support at USD 195.70 remains, the short-term bullish scenario will not be at risk. It is only a matter of time before seeing what happens in the market of this young cryptocurrency.
Meanwhile, Bitcoin is trading at around USD 57,371 and has accumulated a 0.6% loss in the last 24 hours. Its trading volume is above USD 31 billion, and its market capitalization is about USD 1.08 trillion, according to CoinGecko.
By Alexander Salazar