• Wed. Jun 19th, 2024

Solana price is recovering: Has SOL bottomed?

Solana price went vertical on Tuesday as the overall market sentiment improved. SOL rose to a high of $32.42, which was the highest level since October 10. It has risen by more than 17% from its lowest level this month. 

Why did SOL jump?

Solana price has been under intense pressure in the past few days. This situation changed on Tuesday when it went parabolic. The rally happened as the broad market sentiment improved. For example, the fear and greed index rose to the neutral level of 54, which is higher than last week’s 54. 

Other market gauges showed that investors were starting to get excited about the market. For example, American stocks rose for the third straight day. The main market indices like the Dow Jones and the Nasdaq 100 indices are having their best month since 2020.

Meanwhile, the US dollar index (DXY) has pulled back from this month’s high of $115 to about $110. America’s bond yields retreated as investors started to predict that the Federal Reserve will pivot soon. Therefore, Solana rose because of the close correlation that exists between cryptocurrencies like Bitcoin and stocks. 

Solana price has also risen because of its growing ecosystem. Recent data show that the number of developers building on Solana has risen despite its regular outages. 

While Solana’s DeFi volume is slipping, its NFT products are doing well. Indeed, its total daily trading volume was higher than that of Ethereum. However, analysts caution that these metrics may not be accurate because of the transaction costs between Solana and Ethereum.

Ethereum is known for its significantly higher transaction costs compared to Solana. As a result, it is much easier and cheaper for traders to wash trade in Solana compared to Ethereum. 

Solana price prediction

Solana price has made a strong rebound in the past few days. This rebound happened after the coin formed a double-bottom pattern at $27.74. As it rose, it managed to move above the important resistance level at $29.50. It has risen above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has risen above the overbought level.

Therefore, Solana will likely continue rising if bulls can manage to move above the resistance level at $32.37, which was the highest point this week. A drop below the support at $30 will invalidate the bullish view.

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