Last week proved to be a significant triumph for Solana, witnessing a notable surge in the token's price. According to data from CoinMarketCap, SOL experienced a remarkable uptick of over 20% within the past seven days, propelling its value to touch $175. However, SOL faced a slight setback following this peak.
At present, SOL is trading at $174.39, accompanied by a market capitalization exceeding $78.2 billion. The retreat from the $175 mark also had repercussions on the token's social indicators, with a notable decline observed in its Weighted Sentiment, signaling prevalent bearish sentiment in the market. Nevertheless, the Social Volume of SOL remained relatively steady.
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Source: Santiment
Despite the recent downturn, investors are encouraged not to lose hope, as a recent analysis has hinted at the potential for a significant surge in SOL's price. Notably, Alex Clay, a well-known crypto analyst, recently shared insights on Twitter, highlighting a compelling development.
Clay pointed out the emergence of a rounding bottom pattern in SOL's monthly timeframe. Should this pattern materialize, investors may soon witness SOL charting new record highs.
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SOL's On-Chain Signals: What's Next for Investors?
AMBCrypto recently delved into Solana's on-chain metrics to provide insights into whether investors should anticipate a significant surge in the near future. According to their analysis, SOL's Funding Rate experienced a notable increase, indicating heightened activity among derivatives investors who were acquiring SOL.
Source: Santiment
Additionally, data from Coinglass revealed a surge in SOL's Open Interest, potentially fueling a weekly rally for the coin. Despite these positive indicators, concerns lingered. SOL's fear and greed index stood at 75% at the time of assessment, signaling an extreme phase of greed in the market. Historically, such high levels of greed often precede price declines.
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Source: Coinglass
Moreover, a detailed examination of SOL's daily chart was conducted to ascertain its trajectory. The Relative Strength Index (RSI) appeared relatively bullish, boasting a value of 64.
Source: TradingView
However, the Chaikin Money Flow (CMF) exhibited movement in the opposite direction, suggesting potential divergence in market sentiment. Furthermore, Solana's price had reached the upper limit of the Bollinger Bands, signaling a possible price correction.
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Potential Scenarios for SOL's Price
In the event of a price correction, SOL's price could decline to $173.5, as liquidation would increase significantly, potentially serving as a support level.
Source: Hyblock Capital
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Further downward movement might push SOL's price to $165. However, if SOL sustains its weekly bullish momentum, the token could potentially surpass $180.
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