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Solana Bullish Recovery: Impact of ETF Announcements – Crypto Analysis July 3, 2024
While the entire cryptocurrency market is in a phase of indecision, Solana bounces for the third time on the $125 support. Let’s look at the next outlook for the price of SOL.
Solana Situation (SOL)
After peaking at $211, Solana has seen a decline of more than 40%, gradually bringing its price back to around $120. This price level has acted as support for SOL, allowing it to benefit from a bullish momentum that unfortunately ended at $190. Therefore, this last price level makes it a significant resistance. Recently, Solana’s price has bounced once again around $125. Much to the delight of the laggards, the Canadian institution 3iQ and American institutions Vaneck AND 21Share have officially filed their applications to issue a Solana spot ETF. Naturally, there is optimism about the cryptocurrency. Some people do not hesitate to imagine a price of Solana multiplied by 9 if these ETF applications are approved.
However, the market reaction to this news has not impacted the cryptocurrency as much as Bitcoin during the same phenomenon. In fact, the cryptocurrency still seems heavy. This can be partly explained by a market-wide decline in Bitcoin. At the time of writing, the Solana price is trading around $145. Solana’s medium and long-term trend remains bullish. However, the fact that it is below its 50-day moving average raises doubts about the continuation of this trend. Fortunately, we can be reassured by the 200-day moving average, which is still positioned below the cryptocurrency’s price and remains bullish. Note, these MAs are getting closer, suggesting upcoming volatility to watch out for. On the price dynamics side, we can of course observe that it has recovered, as evidenced by Solana’s price and oscillators. All these elements show genuine buyer interest, suggesting that Solana cryptocurrency is about to form a low, a chart pattern that indicates a bullish continuation.
The current technical analysis was conducted in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today a trainer at Family businessa community of thousands of proprietary traders active since 2017. There you will find Live, educational content and mutual aid on the financial markets in a professional and friendly atmosphere.
Solana Derivatives Focus (SOLUSDT)
The open interest of SOL/USDT contracts has evolved similarly to the cryptocurrency. This suggests that speculators have mainly taken long positions. This hypothesis is supported by positive and slightly increasing funding rates, which illustrate the participation of traders mainly oriented towards buying. On the liquidation side, they remain low and do not send any concrete signals. However, it can be noted that the most significant liquidations occurred during the latest bullish impulses, suggesting a capitulation of sellers on the cryptocurrency.
The three-month SOL/USDT liquidation heat map shows that the cryptocurrency has crossed the liquidation zone located around $137. This has not directly attracted buying interest. In fact, Solana first fell below $125 to reposition itself above $135 and continue its uptrend. Incidentally, it is below this latter price level that an apparent liquidation zone has appeared. However, the most significant one is located above the current SOL price, precisely below $180. The price approaching these levels could trigger a huge series of orders, increasing the risk of a period of high volatility for Solana. These zones, therefore, represent a crucial point of interest for investors.
Solana (SOL) Price Hypothesis
- If Solana price stays above $125, a bullish continuation towards the $170 level, or even $190, could be expected. The next resistance to watch out for, if the bullish move continues, could be $210 and above that Solana’s all-time high at $265. At this point, it would represent an increase of over 83%.
- If Solana price fails to stay above $125, a return to $110 levels could be expected. The next support to consider, if the bearish move continues, would be around $100, or even $90. Even lower, support can be seen at $86. At this point, it would represent a decline of less than 40%.
Conclusion
Solana has enjoyed a recovery to its support level established since April. ETF requests from several institutions have sparked considerable optimism in the market, although the impact has not been as strong as expected. Despite some short-term uncertainty, the overall trend remains positive, driven by favorable price dynamics and growing buyer interest. That said, it will be essential to closely observe the price reaction to the different key levels to confirm or refute current hypotheses. It is also important to remain vigilant against potential “fake outs” and market “squeezes” in each scenario. Finally, let us remember that these analyses are based exclusively on technical criteria and that the price of cryptocurrencies can also evolve rapidly based on other more fundamental factors.
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