Since late December, Solana, the 12th largest cryptocurrency in the world with a $9.2 billion market cap, has drawn attention with its outstanding performance. Although the rise was started by the introduction of BONK Inu (BONK), the first meme coin on the Solana blockchain, SOL has been able to maintain it for over six weeks. Solana’s price has increased by 6.3% in the past day to trade at $25.00.
Why is Solana Price Rally Happening?
The difficulties the Solana ecosystem was experiencing in 2023 appear to have been overcome by the cryptocurrency sector. The frequent network failures that have been placed during the year were one of the unsettling patterns. When the FTX exchange crashed, the Solana ecosystem suffered. There was a significant selloff, and SOL tested support at $8.05.
Solana was rapidly labeled a failing project by some, but ecosystem developers persisted in their work despite the criticism. When FTX and Alameda Research commenced Chapter 11 bankruptcy proceedings, the network had severe liquidity issues.
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The Solana ecosystem is firmly established, and the numerous network disruptions are now a thing of the past. The co-founder of Ethereum, Vitalik Buterin, believed that Solana has a thriving development community around the end of last year. Buterin noted that with the removal of money-hungry people, the Solana ecology was prepared to take off.
While bulls prepare for yet another significant breakout, the price of Solana is now contained within a channel that is dropping in trend. Since May, SOL has attempted to break through this channel but has been unsuccessful. However, drops below the channel have maintained the token in a downtrend for at least six months.
Bulls will have another opportunity to be on the attack if support at the lower trend channel boundary holds, with an escaping target of $40.00 and $60.00 in the following weeks.
Before that, Solana’s price must prevent the Moving Average Convergence Divergence (MACD) indicator’s potential sell signal from giving the bears the upper hand. Before betting all on SOL, traders should take the position of the momentum indicator into account.
Initial purchase orders might be placed just slightly above the trend channel’s midpoint resistance. Some investors, however, would want to hold off until the Solana price explodes beyond the channel’s top resistance level and crosses the 200-day Exponential Moving Average (EMA), which is shown in purple at $29.67.
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A clean break and hold above it are likely to verify a medium-term rally in Solana price, with cautious projections of $40 and $60. The selling congestion at $30.00 is an important milestone in the recovery route.
Knowing that the probability of a northward breakthrough is now favorable, bullish investors can stay in their holdings. The 100-day EMA (in blue) and 50-day EMA (in red) are closing the distance between them, indicating the impending formation of a golden cross pattern.
Over the years, traders have employed a golden cross pattern to validate lucrative long bets in asset pairs. A short-term moving average crossing over a long-term one causes it to happen A bullish surge would be certain given this pattern’s appearance on the SOL/USD daily chart; it would be a matter of when not if.
Analyzing Solana Price’s Short-Term Profitability
Some experts would contend that the price of Solana is approaching a potential 18% short-term breakout, which would cause the token to settle just above $30.00. The rectangle pattern that was created when consolidation gained priority between $22.00 and $26.00 is followed by this upbeat forecast for SOL.
A breakthrough to the upside is the most likely outcome given that the Solana price is above all of the applied major moving averages, starting with the 200-day EMA (in purple), the 100-day EMA (in blue), and the 50-day EMA (in red).
Investors can then think about purchasing Solana once it breaks above the rectangle barrier, at a price just above $26.00. From this point, SOL may resolve a move of almost 18% to $30.62. The daily chart analysis indicates that a rise over $30.00 would support a medium-term optimistic view for the price of Solana, with gains aiming for $40.00 and $60.00, respectively.
The four-hour time frame chart’s MACD now displays a buy signal, which improves the situation. Investors may begin to acclimatize to the predicted swing over $30.00 from Friday – moving into the weekend if the momentum indicator supports this suggestion to purchase SOL until the conclusion of trading on Thursday.