The Solana price recovery rally continued today as demand for the token continued to rise. SOL is trading at $36.30, which is the highest level since May 26. It has a market capitalisation of more than $9.69 billion, making it the 17th largest cryptocurrency in the world.
What happened: Solana is a leading platform that allows people to build decentralized applications that are fast, secure, and censorship-resistant. The platform has been used to build applications like Serum, Terra, and Raydium, who prefer it compared to the congested Ethereum.
The network is significantly faster than Ethereum because it can process more than 50,000 transactions per second. Therefore, while Ethereum is the market leader, more developers are switching to alternatives like Solana, Polkadot, and Binance Chain.
Like all altcoins, the price of Solana crashed a few weeks ago as investors remained alarmed about regulations and high-interest rates. The price fell to $19.7 and has since then bounced back by almost 90%. So, what next for Solana prices?
A closer look at the SOL price on the four-hour chart shows a close resemblance with that of Ethereum. The price is approaching the important resistance at $37.32, which was the highest level on May 26. It is also being supported by the 25-day and 50-day moving averages. Also, it is slightly below the 50% Fibonacci retracement level.
Therefore, at this stage, there are two possible scenarios. First, the price could move above the resistance at $37.2 and invalidate the double-top pattern. If this happens, the price will likely jump to the 61.8% Fibonacci retracement level at $43, which is about 18% above the current level.
The second scenario is where Solana lacks enough buyers above $37.2. This will mean that it has formed a double-top pattern, meaning that it could see a major sell-off since the neckline is at $19.
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