Solana (SOL) experiences impressive recovery with steady gains, rising by 10% to $21.80 in active trading.
Although SOL is still far from its peak value of $260, the recent upward trend has pushed it above $20, signaling positive signs of a continued bullish sentiment.
Factors Driving SOL’s Rise:
Several factors have contributed to the increase in SOL’s price. These include macroeconomic conditions like inflation and regulatory developments in the crypto industry. Furthermore, Solana has gained adoption and support from various ecosystems, leading to the launch of cross-chain bridges.
The main driving factor behind SOL’s rise is likely the significant increase in decentralized exchange (DEX) volume. DefiLlama, a blockchain analysis platform, reported a notable spike in Solana’s DEX volume earlier this week. According to the report, SOL’s DEX volume surged by over 80%, ranking it fifth in the overall crypto market. This surge in trading activity is believed to have positively impacted SOL’s price performance in the past week.
Despite the recent gains of SOL, the Total Value Locked (TVL) has remained stagnant and has not responded to this upward trend. Since the decline following the FTX collapse in November, the TVL has been around $275 million and has not shown any significant increase in value.
Solana (SOL) Price Forecast: Analysis and Prediction:
SOL is currently on an upward trend, showing positive price movement as the weekend approaches. However, there are intermittent red candles on its weekly chart, indicating the presence of bearish activity this week.
Based on the technical indicators, SOL’s relative strength index (RSI) is at 50, indicating a neutral zone between oversold (35) and overbought (75) regions. The Moving Average Convergence/Divergence (MACD) is currently in the buy zone, suggesting a bullish signal.
The green histogram bars further indicate an upcoming bullish trend. If the bulls continue their momentum, SOL is expected to maintain an upward trend in the coming days.
SOL 7-day chart shows upward trend / Source @Tradingview
Currently, SOL is being traded at $21.83, benefiting from crucial support found at the $15.43 price level a few weeks ago. As a result, the altcoin is now approaching the resistance level of $22.50.
A successful breakthrough of the $22.50 resistance level is expected to drive SOL’s price towards reclaiming the psychological resistance at $25. In such a scenario, a further rally to the $23.00 resistance level can be anticipated following the break above $22.
However, it is important to note that external market conditions, which currently lean towards bearish, could potentially lead to a short-term decline below $20.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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