SOL price has proved its worth to investors following rumors of a potentially massive liquidation by bankrupt exchange FTX. The smart contracts token’s history with FTX has from November haunted its performance, especially the drop to $8.
Investors feared that as the court greenlights FTX to sell its crypto holdings mainly in Solana, the price would dump significantly. However, as reported, FTX has no intentions to sell off its SOL holdings at once but prefers a structured process where $100 million is sold every week with the possibility of increasing the transaction limit to $200 million in due time.
SOL Price On The Move
The 5% increase on Thursday to $18.85 directs that Solana may have bottomed and is awaiting the next catalyst to launch a rally into the bull market. Support as discussed in the previous SOL price analysis at $17.5 seems firm enough to keep the uptrend intact. Holding this support in place is the lower ascending trendline.
Traders should be on the lookout for a possible buy signal from the Moving Average Convergence Divergence (MACD) indicator to help ascertain the validity of the forming uptrend targeting highs above $20. The blue MACD line should cross above the red signal line to affirm the bullish grip.
Another buy signal might come from the Supertrend, an indicator that will flip below SOL price and change the color from red to green as confirmation for a longer uptrend.
Despite the 5% pump, Solana is still in the woods. A subsequent break above the upper ascending trendline would serve as a signal that odds favor gains above $20. Until then, traders should tread with caution as there is no guarantee SOL price won’t roll back and weaken support at $17.5 for an extended downtrend to $13.5 and $10 if investors start panic selling.
The four-hour chart shows a stronger bullish comeback, validated by a buy signal from the MACD. More traders would consider Solana a better investment if the token upholds the support at $17.5 and closes the gap to $20.
The 50-day Exponential Moving Average (EMA) holds below SOL price and is expected to solidify the uptrend going into the weekend. Solana is also nurturing a V-shaped recovery with a target of $20.5. This coupled with the 61.8% retracement from the dip to $17.5, could push the price significantly higher and bring the next major resistance at $25 within reach.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
