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Solana, the 12th largest cryptocurrency in the world with a market capitalization of $9.2 billion, continues to turn heads with its exemplary performance since late December. Although the launch of Bonk (BONK) apparently sparked the rally, SOL supported it for almost six weeks. Solana’s price is now trading at $25.00 after a 6.3% increase in 24 hours.
What is driving Solana’s price rally?
The cryptocurrency industry appears to have overcome the woes facing the Solana ecosystem in 2023. One of the disturbing trends that occurred repeatedly over the 12 months was frequent network outages. The Solana ecosystem then fell victim to the implosion of the FTX exchange, which led to a sell-off, where SOL tested support at $8.05.
Some people were quick to call Solana a failed project, but the ecosystem developers continued to grow amid such criticism. The network suffered severe liquidity problems when FTX and Alameda Research filed for Chapter 11 bankruptcy protection in the United States.
On the bright side, frequent network outages are now a thing of the past and the Solana ecosystem is firmly entrenched. Towards the end of last year, Vitalik Buterin, the co-founder of Ethereum, felt that Solana had a vibrant development community. Buterin added that the Solana ecosystem was ready to take off, now that the money-hungry individuals were out.
In the meantime, Solana’s price is currently holding within the confines of a downtrend channel as the bulls prepare for another major breakout. SOL has since May tried but failed to break above this channel, although declines below the channel have kept the token in a downtrend for at least six months.
If the support at the lower boundary of the trend channel holds, the bulls will have another chance to be on the offensive – for a breakout targeting $40.00 and $60.00 in the coming weeks.
Before that, Solana price has to fight the possibility that a sell signal from the Moving Average Convergence Divergence (MACD) indicator will hand over to the bears. Traders should consider the position of the momentum indicator before betting on SOL.
Initial buy orders could be placed slightly above the middle resistance of the trend channel. However, some investors may want to wait for Solana price to break above the upper resistance level of the channel in confluence with the 200-day exponential moving average (EMA) in purple at $29.67.
Seller congestion at $30.00 is a crucial level in the road to recovery, with a clear break and hold beyond that likely to validate a medium-term uptrend in Solana’s price, where to reach $40 and $60 would be a conservative projection.
Bullish investors can hold their positions knowing that the odds currently favor a breakout to the north. Notice the 50-day EMA (in red) closing the gap with the 100-day EMA (in blue) and signaling an incoming golden cross pattern.
A golden cross pattern has over the years been used by traders to confirm profitable long positions on asset pairs. This occurs when a short-term moving average moves above a long-term average. With such a pattern appearing on the SOL/USD daily chart, a bullish spike would be a matter of when, not if.
Evaluation of short-term profitability in the Solana price
Some analysts may argue that Solana’s price is closing on a potential short-term 18% breakout that will see the token stabilize slightly above $30.00. This bullish outlook for SOL follows the formation of a rectangle as consolidation took hold between $22.00 and $26.00.
Since Solana’s price is above all the major applied moving averages, starting with the 200-day EMA (in purple), the 100-day EMA (in blue) and the 50-day EMA days (in red), a breakout of the upside is the most likely outcome.
In this case, investors may consider buy Solana slightly above $26, after breaking through rectangle resistance. From there, SOL can resolve a move of around 18% to $30.62. Based on daily chart analysis, a move above $30.00 would validate a medium-term bullish outlook for Solana price for gains targeting $40.00 and $60.00, respectively.
The MACD is signaling a strong buy signal on the four-hour chart, indicating that SOL’s performance may trend higher in the near future. If this momentum continues through the end of trading on Thursday, investors can expect the price to potentially rise above $30 starting Friday and continuing through the weekend.
The Solana community celebrates the latest developments
The Kin Foundation recently announced an on-ramp solution called Kinetic, dedicated to app developers in the Solana ecosystem. According to an article that first appeared on The Block, this ramping feature will allow developers to easily add crypto payments and other use cases to their platforms.
Kinetic refers to an open-source middleware technology designed for integration into the Solana-based application. It contains the APIs and SDKs that developers use when deploying cryptographic integrations on their platforms. The system was designed to simplify the process; therefore, it does not need excessive coding. The Kin Foundation claims that the software package will benefit both crypto-native developers and mainstream developers.
The Solana Foundation, while speaking to the community, recently said that it believes “2023 will be a year where the Solana community really takes the lead and continues to build the framework for a decentralized, permissionless economy.” A vision for the Solana community in 2023 has also been posted – details in the tweet below.
Solana alternatives to buy today
Before buying Solana, investors can consider some of the best crypto pre-sales in the market.
We’ve reviewed the top 15 cryptocurrencies for 2023, as analyzed by the CryptoNews Industry Discussion Team.
The list is updated weekly with new altcoins and ICO projects.
Disclaimer: The Industry Talk section features information from crypto industry players and is not part of the editorial content of Cryptonews.com.
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