The Solana price recovery is well underway. But there are some significant levels for both the bulls and the bears to keep an eye on.
Solana (SOL) is higher this morning, trading at $42.82, up by $2.16 (+5.27%).
Decentralised App (DApp) protocol Solana has benefited more than most from the return of optimism sweeping the cryptocurrency market.
Following July’s $21.96 low, SOL has nearly doubled in price. In the last three week’s its market cap has swollen by more than $5 billion to $11.7b. This has lifted Solana above Litecoin, which currently has an $11.5b valuation.
Furthermore, following the appreciation, Solana has left a string of resistance firmly in its wake. However, above the market, barriers remain.
The daily chart highlights some obvious obstacles ahead for Solana.
Firstly, strong horizontal resistance is offered by Junes $48.52 high. This should be considered important because the last SOL reached $48.52, the price collapsed 50% in the two weeks that followed.
Above that, the former all-time high at $53.30 comes next. Again, a considerable resistance level and the only thing that stands between $48.50 and the Solana price reaching May’s $61.44 record.
However, two things the bulls should bear in mind. The first is that the trading volume is notably light compared to previous bull runs. This suggests a lack of fresh buying activity.
Secondly, the Relative Strength Index is at 69.89 and close to overbought. Therefore, a sudden spike to $48.50 may be reversed, at least the first time around.
Support is seen below the market at the 100-day moving average. The indicator at $35.22 reversed Monday’s decline and was the catalyst for the 22% bounce that followed.
The outlook is positive as long as SOL sustains the 100 DMA. However, should the support fail, the immediate bullish outlook becomes invalid and leaves the price vulnerable to long liquidation.
For more market insights, follow Elliott on Twitter.