Solana price prediction: Is this the start of a new bull run?
- The Solana price bounced back on Wednesday after crashing on Monday.
- The rally coincided with the overall rebound of Bitcoin and other altcoins.
- Other assets like stocks and commodities also rebounded.
The Solana (SOL/USD) price bounced back on Wednesday. The coin rose to $26.27, which was about 18% above the lowest level this week. This performance catapulted its total market capitalisation to more than $7 billion, making it the 14th biggest cryptocurrency project in the world.
SOL price rebounds
Solana is a fast-growing blockchain project that helps developers build decentralized applications like games, DeFi, and non-fungible tokens (NFT). The network was launched in 2018 by a company known as Solana Labs.
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Since then, the platform has raised hundreds of millions of dollars from leading venture capital firms like Andreessen Horowitz and Polychain. The most recent fund was $314 million.
Solana is a project that does what Ethereum does but at a faster rate. For example, the network can handle more than 50,000 transactions per second. This is substantially higher than Ethereum, which handles about 13 transactions per second. The network was also created using a proof-of-stake technology that is considered more superior than the proof-of-work technology. Ethereum is moving towards proof-of-stake in its ETH 2.0 upgrade.
Like all cryptocurrencies, the Solana price declined sharply on Monday. This decline coincided with the overall decline of crude oil prices and global stocks. Oil prices fell after the latest deal between OPEC and its allies while stocks declined as worries of the Delta variant rose. Several countries like Australia and France announced some restrictions.
Therefore, the SOL price declined because of the close correlation that exists between cryptocurrencies and indices. The price rebound has also coincided with the recovery in stocks. The Dow Jones index has risen by more than 300 points in the futures market while the FTSE 100 and DAX indices rose by more than 1%. At the same time, Bitcoin cruised above the important resistance at $30,000.
Solana price prediction
The daily chart shows that Solana bounced back on Wednesday. Still, it remains more than 70% below its highest level this week. Another notable fact is that the coin’s 100-day and 50-day moving averages are about to make a bearish crossover.
Solana is also slightly above the important support levels at $22 and $19. It has also formed what looks like a head and shoulders pattern. Therefore, the price will likely break out lower as traders target the next key support at $20. However, a move above the 2 moving averages will invalidate the bearish view.
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