Solana (SOL) witnessed a remarkable recovery last week, showing a string of consistent wins. Currently, SOL is up 10% and is actively trading at $21.80, showing a slight increase in the price of the crypto.
While it is important to note that SOL remains a long way from its all-time high of $260, the recent upward move has lifted its value beyond the $20 mark, showing promising signs of a higher which is strong sentiment.
What’s Behind the SOL Rise?
There are many factors today that can influence the increase in the price of SOL. This includes macroeconomic factors such as inflation and crypto regulation in various areas. In addition, Solana has experienced some success in adopting several ecosystems that have adopted the token and launched cross-chain bridges.
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However, the most likely reason is the increase in DEX volume recorded this week. Blockchain analysis platform DefiLlama revealed a report earlier in the week that Solana experienced an increase in DEX volume. According to the report, SOL’s DEX volume has increased by 80% and ranks fifth in the crypto market. This development likely boosted last week’s price action.
However, Total Value Locked (TVL) did not react to this development and has been stagnant since its decline in November following the collapse of FTX. Currently, TVL is sitting around $275 million with no noticeable increase in value despite SOL’s gains in recent days.
Solana (SOL) Price Outlook And Prediction
SOL is currently trending upwards and continues positive price action over the weekend. However, the scattered red candles on its weekly chart indicate that the bears are active this week.
Looking at the technical indicators, its relative strength index is at 50 in the neutral zone between the oversold region at 35 and the overbought region at 75. The Moving Average Convergence/Divergence (MACD) is currently in buy zone which is a bullish signal. In addition, the histogram bars are green and signal that the trend is bullish, the SOL is likely to have a continuous progress in the coming days.
SOL traded at $21.83 after it found critical support at the $15.43 price level weeks ago. This puts the altcoin near the $22.50 resistance level.
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A break above the $22.50 resistance level would help its price to recover the $25 psychological resistance level. If this happens, SOL is likely to rally to the $23.00 resistance level after breaking above $22. However, a price drop below $20 in the short term remains possible due to the conditions outside the bearish market.
(The content of this site should not be considered investment advice. Investing involves risk. When you invest, your capital is at risk).
Featured Image from iStock, chart from TradingView