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The crypto market can cause losses in both directions. Solana traders should get ready for the next bullish rally in the asset price.
Last updated Sep 14, 2022 at 2:10 PM
Posted Sep 14, 2022 at 1:00 PM
Solana has been showing positive momentum for the last seven days. Things are looking great on the technical side. Let’s see why Solana traders should get ready for the next bull rally of SOL. But first, let’s see the current situation of the market.
Current Market Scenario
Solana is exchanging hands above the $37 price mark with a gain of more than 6% over the last 24 hours. The asset’s movement has been quite promising with more than 17% price appreciation over the last couple of weeks. Data from CoinGecko reveals that SOL has added more than 135% in its 24-hour trading volume. The rising interest and technical indicators show that we might see a bullish rally very soon. But any fundamental change in the crypto market can change this bullish sentiment of the traders. If this happens, it will be a bloodbath for several people sitting with their long positions in the SOL.
The native token of Solana, SOL, has recently seen a promising ascent, with a price increase of over 15% over the previous week. The price increase encouraged investors to look forward to better times.
Even though there have been several good things happening in the neighborhood lately, this hike's stability is still in doubt. Numerous measures suggest that the rise was simply a response to the bullish market at the time. Let's look at the ecosystem's current state of affairs.
SOL recently performed better than a number of cryptocurrencies with greater market capitalizations by ranking among the top cryptocurrencies by total stacked value.
Additionally, SOL's ecosystem demonstrated increased activity, including a partnership with Encode Club – good news that assisted SOL increase its prestige.
The SOL-related news was favorable for the ecosystem, but according to several on-chain measures, these news items were not what caused the price increase. For instance, a decrease in development activities last week was a bad omen. Additionally, SOL was in an overbought zone according to the Relative Strength Index (RSI), which indicated a potential market top.
After increasing over the past few days, SOL's social dominance has now declined, and demand for the token has decreased also. Even though Solana's price action increased, the majority of the metrics were negative. As a result, the price rise of SOL may change course in the future. Therefore, before choosing to go long on the token, traders should exercise caution.
Let’s look at the technical side of the SOL ecosystem to understand how the asset can go fully into a bullish mood.
As the price of Solana continued to rise, it broke through the $36 resistance, providing traders with a breakout opportunity. The fact that an altcoin is moving up the ladder suggests that purchasers are trying to continue the previous recovery rally. Additionally, the buyers' confidence in this rebound is accentuated by the steady development in volume activity, which aims for the previous swing high of $48.5.
The $48.5 resistance serves as a positive limiter for the sideways trend that the Solana price is now in. The current downturn in the cryptocurrency market reduced the market price to $30.2 and erased about 78.6% of the recovery from July and early August.
To take control of the trend, buyers and sellers tugged at this support for almost a week. The purchasers followed their lead and rose from this floor as a result of the market's increasing sentiment. The daily chart shows a rounding bottom pattern as a U-shaped recovery. This bullish pattern is frequently observed at the market's bottom and typically results in a strong comeback.
In the last six days, the positive reversal drove prices up by 24.5%. Solana's price is currently trading at $37.72 and has broken through a local barrier at $36.25 in a bullish manner.
The abrupt price increase today, according to the Bollinger Band indicator, shows that buying activity has gone beyond the standard deviation of the current price range. Therefore, before the rise continues, a retest or consolidation above the $36.25 mark is anticipated.
RSI indicator: The daily RSI climbed over the neutral line, indicating market participants are in favor of the positive rise to $42.6.
Solana traders must pay attention to this upcoming rally. However, proper research should be done about the project before investing. Not financial advice. DYOR!!!