Solana (SOL) has seen a remarkable rebound in the past week, showing a series of steady gains. At the moment, SOL has increased by 10% and is actively trading at $21.80, which reflects a slight uptick in the price of the cryptocurrency.
While it is important to note that SOL remains significantly off its all-time high of $260, the recent bullish move has lifted its value beyond the $20 mark, pointing to promising signs of extended bullish sentiment.
What’s behind SOL Rise?
There are many factors at the moment that could have influenced the rise in the price of SOL. These include macroeconomic factors such as inflation and the regulation of cryptocurrencies in different regions. Additionally, Solana has had some adoption success with some token adoption ecosystems and cross-chain bridge launches.
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However, the most likely factor is the increase in the volume of DEX recorded this week. Blockchain analysis platform DefiLlama revealed in a report earlier in the week that Solana has seen a surge in DEX volume. According to the report, SOL’s DEX volume increased by more than 80% and ranked fifth in the cryptocurrency market. This development likely boosted the price action of the past week.
However, the Total Closed Value (TVL) did not react to this upside and has been stagnant since its decline last November after the collapse of FTX. Currently, TVL is priced at around $275 million with no noticeable increase in value despite SOL’s gains in recent days.
Solana (SOL) price forecast and prediction
SOL is currently trending higher and continued the positive price action until the end of the week. However, the red choppy candles on the weekly chart show that the bears are active this week.
Looking at the technical indicators, its RSI is at 50 in the neutral zone between the oversold area at 35 and the overbought area at 75. The Moving Average Convergence/Divergence (MACD) is currently in the buy area which is a bullish sign. In addition, the histogram bars are green and indicate that an upward trend is ahead and if the bulls continue, SOL is likely to be in a continuous upward trend in the coming days.
SOL is trading at $21.83 after finding an important support at the $15.43 price level weeks ago. This places the altcoin near the $22.50 resistance.
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A break above the $22.50 resistance will help boost the price to regain the $25 psychological resistance. If this happens, SOL is likely to rise to the $23.00 resistance after a break above $22. However, a price drop below $20 in the short term is still possible due to bearish external market conditions.
(The content of this website should not be interpreted as investment advice. Investing involves risk. When you invest, your capital is at risk).
Featured image from iStock, chart from TradingView