Solana (SOL) has shown promising signs of recovery after a recent dip below the $200 mark. Over the past 24 hours, the altcoin surged by 5.02%, pushing its price back to around $206 after briefly touching a low of $179. However, it’s important to note that Solana’s price has retraced slightly since hitting a high of $220, leaving many traders and analysts speculating whether the digital asset can sustain this momentum and make a more substantial move upwards.
After suffering a significant drop of 14.12% over the past week, Solana managed to regain some ground with its recent bounce. The cryptocurrency’s price has fluctuated within a relatively narrow range between $200 and $220 in the past 24 hours, giving traders hope that the worst of the downturn might be over. Currently, Solana is trading at $206, reflecting the 5.02% daily gain. Despite these gains, the price remains below its previous highs, and the market sentiment is still cautious.
However, the recent recovery is not an isolated occurrence. A closer look at Solana’s price chart reveals that the altcoin has shown potential for sustained upward movement, particularly if it can hold above the critical $200 support level. Analysts are watching closely to see if this recovery is a temporary spike or the beginning of a longer-term trend.
One popular theory among crypto analysts is the potential for a Fibonacci wave 3 formation. According to ManofBitcoin, a well-known crypto analyst, Solana’s price movement appears to be working on wave 3 to the upside. In Elliott Wave Theory, wave 3 is often the most powerful and extended wave, typically reaching 1.618x or even 2.618x the length of wave 1.
If this wave 3 theory holds true, Solana could potentially target $225, as the price reaches for higher resistance levels. This would represent a significant 9% move from its current price, offering a potential upside that traders are closely watching. However, there is always the possibility of the trend losing momentum. If Solana fails to maintain its upward trajectory, the wave 3 pattern could fall short of expectations, leading to a pullback.
Despite the recent dip, Solana is showing positive short-term upward momentum. Several indicators support the bullish outlook, suggesting that Solana could continue its recovery if certain conditions hold.
For one, Solana’s Futures Basis has remained positive on major exchanges like Binance and Kraken. When futures contracts trade at a premium to the spot price, it reflects bullish market sentiment. Traders are willing to pay a premium to hold their positions, anticipating that prices will rise. This is a strong signal that many in the market are expecting Solana’s price to continue increasing.
Additionally, the dominance of long positions in Solana’s market further supports the idea of a bullish trend. Data from Coinalyze shows that long positions account for 76.42% of the daily trades in Solana. This indicates that a majority of traders are positioning themselves for further price increases, expecting the altcoin to break past resistance levels and continue its climb.
Moreover, Solana’s exchange flows suggest that more investors are withdrawing SOL from exchanges than depositing it, indicating that traders are accumulating the asset in private wallets. This type of behavior is typical when market participants expect higher prices in the future and prefer to hold their assets off exchanges to avoid potential selling pressure.
While the overall sentiment is positive, it’s essential for Solana to stay above the $200 support level if it is to maintain its recovery. A drop below $200 could signal a reversal in momentum, putting pressure on the altcoin to retest lower support levels. On the other hand, if Solana can hold its position and continue to show upward movement, the price could target key resistance levels at $219 and $223, with the possibility of a breakout if market conditions remain favorable.
Solana’s performance over the past week is not unique to the altcoin itself, as the broader cryptocurrency market has also faced a downturn. However, the signs of recovery in Solana, combined with bullish indicators such as the positive Futures Basis and dominance of long positions, suggest that the altcoin may be poised for further gains in the short term.
In conclusion, Solana’s recent recovery and the potential formation of Fibonacci wave 3 suggest that the altcoin could be on the verge of pushing towards $225. While it remains to be seen whether Solana can maintain its upward momentum, the positive market sentiment and favorable technical indicators paint an optimistic picture for its near-term prospects.
As always, cryptocurrency markets are inherently volatile, and traders should remain cautious and stay informed about broader market conditions. If Solana can hold above $200 and continue to show strength, there is a real possibility that it could reach $225. However, should momentum falter, a potential correction could bring the price back down. Only time will tell whether Solana can turn its recent recovery into a sustained rally.
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