Solana Hovers Below $80 Resistance as a Wave of Positivity Hits — Will SOL Make a Breakout?
Key Takeaways
It also declined by 15% after making its December 15 high but has risen from December 18 and is now traded at 77. Solana encountered strong resistance below $80, but with a new wave of positivity regarding its fundamentals, can it push past it?
Solana Fundamentals
Institutional investors interest
Digital asset investment products, particularly in Bitcoin and altcoins like Solana and Ethereum, have seen increased inflows since late September, largely due to anticipation of U.S. approval for Bitcoin ETFs. However, the trend changed last week with significant outflows from Bitcoin and Ethereum, attributed to institutional investors taking profits, according to a CoinShares report. In contrast, Solana continued to attract substantial institutional investment, significantly increasing its inflows.
Last week, Bitcoin products experienced a reversal, shifting from inflows of $19.8 million to outflows totaling $32.8 million. Similarly, Ethereum saw a decrease, with outflows reaching $4.3 million. In contrast, Solana maintained its strong performance, leading in the institutional market since October. It significantly boosted institutional inflows, surging 240% from $3.1 million to $10.6 million. This increase has pushed Solana’s total inflows over $156 million year-to-date.
Solana Bolstered Rankings
On December 16, Solana achieved a significant milestone by surpassing Ethereum in 24-hour trading volume on decentralized exchanges (DEXs). The Layer-1 blockchain recorded a trading volume of $1.475 billion, $300 million more than Ethereum’s $1.164 billion. This event marks the first time Solana has outperformed Ethereum in this regard.
Additionally, today, December 20, Solana briefly overtook XRP’s place and was in the 5th place according to the market capitalization.
Its stablecoin transfer volume has been the highest among all other chains (ETH, TRX, BNB) for 4 days straight.
SOL Price Analysis
From its lowest point since the all-time high of just below $8 on December 29 last year, the price of Solana started its bull cycle. It made two higher lows since then, but the two highs were at the same level of around $29, forming an ascending flat triangle.
On October 25, the price returned to that area but continued its upward trajectory, resulting in a breakout, and now rose to its next significant resistance below $80. From November 21, we saw the momentum slowing down and the price action forming an ascending channel where the price remains.
The recent signs of struggle pointed at the encountered resistance, but can it make a breakout above it? Judging from the wave structure, this last rise from September 11 was wave 3 out of the five-wave impulse from December last year.
If this is true, we can now see a minor pullback for the development of wave 4, which would bring the price of SOL down to $47. As we haven’t seen a retest of the broken resistance for support, this pullback would serve this purpose, and after the support is established, another high would be expected to enter 2024.
The price may continue its upward trajectory immediately, but it would be a sustainable uptrend if that happens. This is why the expected pullback would be a preferable scenario.
According to this count, Solana has one more room for the upside, and with strong fundamentals, this expectation is reasonable. However, in the short term, a consolidation will most likely occur to exhibit more power later on.
Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
