Solana (SOL) has witnessed a remarkable recovery over the past week, with a series of steady gains. Currently, SOL is up 10% and is actively trading at $21.80, reflecting a slight increase in the crypto price.
While it is important to note that SOL remains significantly far from its all-time high of USD 260, the recent upward move has pushed its value above USD 20, pointing to promising signs of extended bullish sentiment
What’s behind SOL Rise?
There are currently several factors that could have influenced the rise in the price of SOL. These include macroeconomic factors such as inflation and crypto regulation in various areas. In addition, Solana has had some success in adoption, with some ecosystems adopting the token and launching cross-chain bridges.
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However, the most likely factor is the increase in DEX volume recorded this week. Blockchain analytics platform DefiLlama revealed in a report earlier this week that Solana had experienced a spike in DEX volume. According to the report, SOL’s DEX volume has increased by more than 80% and ranks fifth within the crypto market. This development is likely to have boosted the price action over the past week.
Nevertheless, the Total Value Locked (TVL) has not reacted to this upward trend and has been stagnant since the fall last November following the collapse of the FTX. Currently, the TVL sits at about $275 million with no appreciable increase in value despite SOL’s gains in recent days.
Solana (SOL) Price Outlook and Forecast
SOL is currently trending upside and has continued its positive price action into the weekend. However, the periodic red candles on the weekly chart show that the bears are active this week.
Looking at the technical indicators, the relative strength index is 50 in the neutral zone between the oversold area of 35 and the overbought area of 75. The Moving Average Convergence/Divergence (MACD) is currently in the buy zone, which is a bullish signal . In addition, the histogram bars are green and indicate that a bullish trend is imminent and if the bulls continue, SOL is likely to have a sustained uptrend in the coming days.
SOL is trading at USD 21.83 after finding critical support at the USD 15.43 price level weeks ago. This brings the altcoin close to the $22.50 resistance level.
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A break above the $22.50 resistance level will help push the price up to regain the $25 psychological resistance level. If this happens, SOL will likely rise to the $23.00 resistance level after breaking above $22. However, a price drop below $20 in the near term remains possible due to external market conditions that are bearish.
(The content of this site should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).
Featured image from iStock, chart from TradingView