Solana (SOL) is experiencing a significant uptick alongside the majority of cryptocurrencies in the market, following Bitcoin’s price increase. SOL’s value has risen over 5% in the last 24 hours, trading at $111.6. Its trading volume has impressively surged by 94% to $3.5 billion, and its market capitalization has increased by 11% to $50 billion, according to CoinMarketCap data. Currently, Solana ranks just behind the largest stablecoin, Tether (USDT), as the fourth biggest cryptocurrency.
After reaching its 2023 peak at $125, SOL’s price retracted, forming a short-term descending wedge pattern with multiple lower highs. The bearish trend continued slightly below $100, but bulls regained control at $98, reversing the downward trend.
SOL’s recovery coincides with Bitcoin’s strengthening technical structure, finding solid support at $42,000 towards the end of December. Solana has now surpassed the support/resistance zone indicated by the 50 Exponential Moving Average (EMA) and the 20 EMA.
Investors are encouraged to open new long positions and avoid further selling due to the improved technical outlook, propelling SOL above $110. It now contends with the barrier between $115 and $120. The Moving Average Convergence Divergence (MACD) indicator’s buy signal supports the uptrend following the breakout from the descending wedge formation.
If SOL maintains support above $115, it could overcome the $120 resistance and continue its recovery journey towards $200. Conversely, investors who opened long positions above the upper trend line might start taking profits, especially if the day closes below $115.
Furthermore, the Relative Strength Index (RSI) retreating from the overbought zone to neutral territory suggests a potential downward path. If the RSI falls towards the middle line (50) or into the oversold region (below 30), SOL could retest the short-term support at $110 and possibly extend losses to the previous $100 support level.
Additionally, the Total Value Locked (TVL) in the Solana network has surpassed $1.5 billion for the first time since August 2022, indicating a continued rise with the price. Data from Defi Llama, a platform tracking the performance of ecosystems in the Decentralized Finance (DeFi) sector, shows a clear uptrend since October, suggesting a low likelihood of a slowdown in the overall crypto market. This implies investors are pleased with SOL’s positive outlook and continue to lock their SOL for staking rewards.