Solana (SOL), the cryptocurrency behind Solana’s high-performance smart contract-enabled blockchain, reached an impressive $830 million in trading volume on Thursday, according to data provided by crypto analytics platform Token Terminal. It was the second-highest daily trading volume in two weeks, behind only Wednesday (15 February ) with a volume of 850 million dollars.
The increase in trading volume came as Solana dropped sharply below its 21-day moving average (DMA) of $23.0. The cryptocurrency last traded around $22.80 per token on Friday, up about 2.5% on the day, but down about 5% from Thursday’s weekly highs above $24. Solana this week failed to match the results achieved by its main competitors Bitcoin and Ethereum.
On Thursday, Bitcoin managed to hit new eight-month highs of $25,000, while Ethereum managed to reach its highest level since last September at $1,700. Both have since retreated from those highs. Solana, meanwhile, failed to test its recent highs of $26.00 after failing to convincingly break the 21DMA and under selling pressure ahead of the 200DMA, which is currently at $25.24.
Price Forecasting – Where Next for SOL?
Solana’s 200DMA, which has been a key resistance area in recent weeks, isn’t the only thing blocking the way up. The $26.00-$2,700 area is a key long-term support-turned-resistance area, and if Solana were to break above that, it would face significant downtrend resistance that extends into early 2022. .
But the broader cryptocurrency market is rising despite rising macroeconomic factors, such as chatter from Fed policymakers this week about a possible return to a 50 basis point rate hike. This resilience, if continued, may continue to support Solana. While the cryptocurrency has already recovered a staggering 180% from its late 2022 lows of around $8.0 per token, it remains more than 90% below its 2021 record highs.
The fallout from last year’s FTX/Alameda debacle, which caused a massive exodus of capital from Solana’s decentralized finance (DeFi) ecosystem – Sam Bankman Fried’s FTX hedge fund and Alameda were big supporters and users of Solana – could still have a significant impact on Solana’s price. Some argued that the Solana ecosystem would “die” along with FTX and Alameda. But he did not die. Daily active users remained at 140,000 on Thursday, according to data from Token Terminal.
There may well be room for further pricing on the post-FTX/Alameda SOL pessimism, which along with the broader crypto rally could lift the cryptocurrency above the above key resistance levels in the coming weeks. If Solana were able to make a significant break north of the $30 level, it would open the door for a quick rally to the next key resistance area around $39, a 70% upside from current levels.
