Solana price forms a rare pattern: will it go beast mode soon?

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As a seasoned analyst with over two decades of experience in financial markets under my belt, I have seen more than a few market cycles and bullish rallies that have turned into bearish trends. However, when it comes to Solana (SOL), I see more green shoots than red flags.

The price of Solana has shifted towards a technical downtrend, mirroring a strengthening trend of crypto sell-offs following the Federal Reserve’s aggressive interest rate stance.

The fifth largest digital currency, Solana (SOL), has fallen to the significant support level at $200.

Technicals point to a Solana price comeback

The daily graph indicates that the price of Solana (SOL) has developed several bullish chart formations, suggesting an upward movement in the coming days. Initially, the coin is shaping up as a falling wedge pattern, which consists of two trendlines sloping downwards and gradually converging. Typically, this pattern results in a powerful bullish breakout when the lines get close to their intersection point.

Following that, the price of Solana exhibited a break-and-retest pattern as it moved towards the support at around $203. This pattern occurs when an asset briefly surpasses a significant resistance level before testing or revisiting it again. The break-and-retest is often interpreted as a sign of continuation, suggesting that the price may resume its previous upward trend. The $203 mark held significance because it was close to the highest level Solana reached in March this year and aligned with an inverse head and shoulders pattern.

Thirdly, Solana continues to surpass both its 100-day and 200-day Exponential Moving Averages, as well as key support and resistance points defined by the Murrey Math Lines. This suggests that the SOL coin might soon rebound and exhibit a strong performance. If it does, investors should keep an eye on the $263 mark, its highest peak from last month. Breaching this level would indicate further potential growth towards $300.

SOL has strong fundamentals

The value of Solana is supported by robust underlying factors, as it has emerged as a significant competitor to Ethereum (ETH). By attracting both developers and users in large numbers, Solana poses a significant challenge to Ethereum. As per TokenTerminal, Solana boasted over 5.1 million active users within the past 24 hours, which far surpasses Ethereum’s 441,000 and Tron’s 2.4 million users.

This year, Solana has accumulated a significant amount of transaction fees, totaling over $700 million, due to the growth of its ecosystem. Notably, these fees are relatively smaller compared to Ethereum’s $2.42 billion, as Solana is recognized for offering lower fee rates.

Moreover, Solana holds significant influence within the meme coin sector, with its associated tokens boasting a market capitalization surpassing $20 billion. Furthermore, it maintains a substantial presence in the Decentralized Public Infrastructure industry by supporting networks such as Helium (HNT) and Hivemapper.

Significantly, optimism is growing that a future Securities and Exchange Commission (SEC) could endorse a standard Solana Exchange-Traded Fund (ETF). Previously, Gary Gensler’s SEC declined such an ETF since they deemed SOL as a security. However, with Paul Atkins potentially in charge, there might be approval for more mainstream digital coins.

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2024-12-19 19:52