Altcoins in the decentralized finance (DeFi) are flying high and Solana (SOL) is at the forefront of this impeccable rally, up 13% in the last 24 hours to $43.41. The smart contracts token can be said to be at the beginning of a lengthy climb, with many investors and analysts wondering if SOL can mimic the previous bull run to the all-time high of $260.
The start of a bull run is often characterized by a persistent uptrend with minimal pullbacks. Solana price performance since mid-September has shown similar sentiments.
If SOL upholds higher support, the bullish outlook depicted especially in October, could propel it above $50. This impressive surge provides traders with plenty of scalping opportunities.
However, as they buy and sell, they should do so cautiously, realizing that Solana is heavily overbought and may need to consolidate or correct for liquidity at lower price points.
The Crypto Winter Is Over For Solana
Exactly a year ago, the crypto market faced what went down in history as one of the biggest crashes caused by the collapse of Sam Bankman-Fried’s crypto empire. The domino effect landed on the empire in full force after CoinDesk published an article that revealed Alameda Research, Fried’s trading firm, was siphoning customer funds from the crypto exchange FTX.
To cut the long story short, FTX filed for bankruptcy, leaving creditors counting losses. Fried is in court fighting to stay out of jail while bankruptcy proceedings continue with the hope of making creditors whole.
As for Solana, the token plunged massively to $8 due to its relationship with FTX and Alameda. It is estimated that FTX holds approximately 55.8 million SOL tokens.
At some point, people referred to Solana as a dead ecosystem. However, it has shown resilience in the last 12 months—more than doubling its value since last month.
If Solana keeps up with the uptrend to $50 and $60, FTX customers who claim $10 billion may be fully reimbursed. At the moment, they can only recover up to 80% of their claims against the bankrupt FTX.
What’s Next For Solana, Chart Analysis
The Directional Movement Index (DMI) reveals on the daily chart that bulls have the bigger say at the moment and will continue to influence the direction Solana price takes.
However, investors should keenly follow the indicator as a correction will follow swiftly if the +DI line in blue begins to retreat while the -DI line in red climbs.
For new buy entries, traders must have to wait for Solana to confirm higher support, preferably above $40. This will allow for the collection of liquidity for the next move to $50.
On the downside, losing support at $40 may encourage bears to push for lower price levels. Investors may consider closing their positions to lock in the gains, thus creating more selling pressure. In that case, it would be prudent to expect a sweep at $35 but if push comes to shove, Solana could drop to retest $30.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.