With the entire cryptocurrency market in an indecisive phase, Solana bounced back for the third time from the support at $125. Let’s examine the future outlook for SOL price.
SOL Situation
After reaching a peak of $211, Solana suffered a drop of over 40%, gradually bringing its price back to around $120. This price level acted as support for SOL, which was able to benefit from the bullish momentum that unfortunately ended at $190. This latter price level has therefore become a notable resistance. Recently, Solana's price has again rebounded to around $125. Much to the delight of latecomers, Canadian institution 3iQ and American institutions Vaneck and 21Share have officially submitted applications to issue a spot Solana ETF. Naturally, optimism for the cryptocurrency is felt. Some do not hesitate to imagine that if these ETF applications are approved, Solana's price will increase nine-fold.
Nevertheless, the market reaction to this news has not affected the cryptocurrency as much as Bitcoin did during the same phenomenon. In fact, the cryptocurrency still seems to be heavy. This can be partially explained by the Bitcoin drop affecting the entire market. At the time of writing, the price of Solana is trading around $145. The medium to long-term trend of Solana remains bullish. However, the fact that it is below the 50-day moving average raises doubts about the continuation of this trend. Fortunately, the 200-day moving average is below the price of the cryptocurrency and remains upwards, which gives us some peace of mind. These MAs are approaching, suggesting that we should consider the upcoming volatility. In terms of price action, we naturally see that the price is resuming, as evidenced by the price and oscillators of Solana itself. All these factors indicate real buyer interest and suggest that the Solana cryptocurrency is about to form a trough, which is a chart pattern that indicates a bullish continuation.
The current technical analysis was carried out in collaboration with Elie FT, an investor and avid trader in the cryptocurrency market. Family Tradingis a community of thousands of proprietary traders active since 2017. You will find live, educational content and mutual support on financial markets in a professional and friendly atmosphere.
Solana (SOLUSDT) Derivatives in Focus
Open interest in the SOL/USDT contract has been trending in line with the cryptocurrency, suggesting that speculators are primarily taking long positions. This hypothesis is supported by the positive and slightly increasing funding rate, indicating that trader participation is primarily geared towards buying. On the liquidation side, liquidations remain low and have not sent any concrete signals. However, the most significant liquidations have occurred during the most recent bullish impulse, suggesting that crypto sellers have capitulated.
The heat map of SOL/USDT liquidations over a three-month period shows that the cryptocurrency has surpassed the liquidation zone around $137, which did not directly attract buying interest. In fact, Solana first dropped below $125, but then continued its upward trend above $135. Incidentally, below this latter price level, a clear liquidation zone appeared. However, the most important one is above the current SOL price, below $180 to be precise. Prices approaching these levels will trigger large order volumes, increasing the risk of periods of increased volatility for Solana. Therefore, these zones will be of key interest to investors.
Solana (SOL) Price Hypothesis
- If the price of Solana sustains above $125, we expect the bull run to continue to $170 or even $190. If the bull run continues, the next resistance to consider is $210 and beyond that Solana’s all-time high of $265, which would represent a rise of over 83%.
- If the price of Solana fails to rise above $125, we expect it to drop back to the $110 levels. If the bearish movement continues, the next support to consider is around $100 or even $90. If lower, support at $86 will be in focus. At this point, it will be less than 40% downside.
Conclusion
Solana has been recovering at support levels established since April. ETF requests by several institutions have caused notable optimism in the market, even if the impact was not as strong as expected. Despite short-term uncertainties, the overall trend remains positive due to favorable price movements and growing buyer interest. That said, it is important to closely watch the price reaction to various key levels to confirm or disprove current hypotheses. It is also important to be wary of potential “fake-outs” or market “squeezes” in each scenario. Finally, keep in mind that these analyses are based solely on technical criteria and cryptocurrency prices can change rapidly based on other, more fundamental factors.
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Family Trading is a trader community that has been operating since 2017, providing educational and engaging content for investors in the cryptocurrency market, with the help of Elie FT, an investor and trader who is passionate about the cryptocurrency market.
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