Solana’s (SOL) astonishing revival from its FTX-caused plunge was noteworthy, with a 76.21% increase in a month. More than half (56.31%) of these gains were seen in the last two weeks, while 28.53% happened in the last seven days.
The token plunged to a low of $8.14 on December 29 and is now trading at $21. Investors are still attempting to decipher if this uptrend will be permanent or temporary.
BONK Meme Coin Rescues Solana Price
The last year has been rough for the cryptocurrency, thanks to the FTX scandal that bankrupted its main backer. Additionally, two popular NFTs on Blockchain, DeGods and Ya00ts, announced their plan to move to Polygon in the first quarter of 2023.
Nevertheless, hope came with the release of BONK, the first and most popular meme-inspired token. It was launched on December 25 and caused SOL’s price to surge by 34% in just 48 hours. BONK’s value went up over 3000%, but has now dropped 73% from its all-time high.
Platforms such as Magic Eden have expressed their intention to accept BONK as currency. Additionally, NFT projects like Jungle Cats offered holders BONK rewards for staking their NFTs.
At the moment, BONK’s popularity is uncertain. It is possible that its use will be discontinued in the future, but for now, it gives the market something exciting to look forward to.
Solana (SOL) Price Prediction Technical Analysis
SOL has been trading higher than its 20, 50, 100, and 200-day EMAs, which indicates that the short- and longer-term outlook is still bullish. The next EMA-related target for SOL is the 200-day MA, which is currently at $30.44.
The trading volume is at 2.511 million, which is lower than the 9.148 million average. Solana’s price is at $21.13, a 3.58% decline from the previous day. A bearish inverted hammer pattern is being formed, which suggests that the price may decline further.
The RSI is at 65.93, after reaching a peak of 87.84 on January 14. The potential support for the RSI to bounce is the 60 level.
The MACD is at 2.55, signal line at 1.93, and histogram at 0.63. This suggests that the long-term trend is up, but the gap between the MACD and signal line is narrowing, indicating that the upside momentum could be waning.
The Fibonacci retracement levels from the recent surge show high probabilities of the market being supported. SOL was rejected from the 0.236 FIB level of $21.06 and the next support is at $18.58, which is the 0.382 FIB and coincides with the current support range from $17.64 to $18.86.
If the support holds, the next target for the cryptocurrency is the $26.89-$28 psychological resistance. Technical indicators back this assertion, as the price is in a reversal phase but with a strong underlying trend. Investors should be cautious when taking positions as SOL may slide in the upcoming days, especially considering the overall stagnation in the crypto market.
