Solana (SOL) is set to gain as analysts note a cup-and-handle breakout formation in the multi-year price chart. The analysis of this pattern suggests the probability of SOL price reaching the level of $4,000.
Should it be realized, Solana’s valuation would be 20 times its current value. This would position its market cap at $2 trillion which is equal to Bitcoin’s existing market capitalization
SOL price has shown remarkable strength in the past few months, with its value increasing by more than 220% in 2024. It nearly reached $264, a record high, but then pulled back to $203.
The technical and on-chain analysis continues to point to a possibility of further upward movement for the market.
SOL Price Market Recovery and Trading Volume Surge
SOL price fell by more than 16% from its November highs to trade at $205.41. This level corresponds to the 61.80% retracement of the Fibonacci tool alongside the 50-day Exponential Moving Average (EMA) providing a strong area of reversal.
The cryptocurrency has since climbed back up and is trading at about $220. This could be an indication that it may climb further up.
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This recovery is also affirmed by the on-chain data. The daily trading volume for SOL increased from $2.92 billion to $7.62 billion in just a week. The last time such trading volume was observed on November 20.
This increase is attributed to increased market interest and liquidity that are important determinants of the price rallies.
In addition, the long-to-short ratio for Solana has increased to 1.03. This was the highest level in a month, as shown by Coinglass data.
A ratio above one suggests that more traders are using call options than put options. This is a sign of a bullish market.
Supporting this, SOL price has bounced back from a steep decline that was seen at the beginning of the week.
According to the analysts if the $205.41 support level remains intact, Solana may attempt to revisit its recent high of $247 and open the door for higher prices.
Bullish Signal For SOL Price
Furthermore, Altcoin Sherpa has given a bullish signal for Solana. It indicating that a bottom may be in the making in the near future.
According to the analyst, the bottom formations are not always stable. However, the result of such formations usually gives a good return to those who invest at this stage.
CryptoQuant data aligns with this view as Solana is among the altcoins that are likely to reach new all-time highs.
Recent retracement has created the opportunity for a bounce back. Heatmaps also highlight Solana as one of the strongest contenders for future expansion, highlighting its strong performance indicators.
ETF Prospects and Broader Market Dynamics
Solana ETF listing has been rumored to have been approved in the marketplace. Currently, there is still no approval from the U.S. Securities and Exchange Commission (SEC). However, experts believe it will likely be approved, given the change in leadership in January.
Several firms have already submitted an application for a spot Solana ETF, which may increase the liquidity of SOL in the market.
Currently, SOL is trading at $225, and the market capitalization has crossed $107 billion. The asset is truly stable in terms of price fluctuations and has a solid technical background of the token, which makes it one of the most promising among altcoins to reach new all-time highs.
The overall sentiment in the crypto market remains bullish, and the alts are rallying alongside Bitcoin.
