Solana’s Price Experiences a Reshuffling
Solana (SOL) has surged past the $100 mark, signaling the potential for further price gains. The altcoin season rally in December saw SOL, along with other Layer-1 Proof of Stake networks like Avalanche (AVAX) and Cardano (ADA), experience triple-digit percentage price increases. However, SOL faced a 33% decline from $126 to $85 between December 25 and January 7. Despite this, SOL has made a recovery since January 8, with a 20% bounce back to reclaim the $100 milestone. The approval of a Bitcoin spot ETF has contributed to positive market sentiment, setting the stage for another price rally for SOL in the coming weeks.
Investors have taken notice of SOL’s potential and have staked 4.51 million SOL this week. This staking trend mirrors the pattern observed before SOL’s historic rally in December 2023. On January 8, 378.6 million SOL was deposited into staking contracts, but as of January 10, that figure has risen to 398.5 million SOL. This increase in staking is considered a bullish signal as it enhances the security and efficiency of the PoS network and temporarily reduces the supply of SOL available for trading.
The correlation between SOL staking and price rallies is evident in historical data. The December rally to $126 coincided with a 19.2 million SOL increase in staking. If this pattern repeats, the 4.51 million SOL staked this week could pave the way for bullish price action in the future. Furthermore, the approval of the Bitcoin Spot ETF could drive up market demand for altcoins, potentially leading to an accelerated breakout in SOL’s price.
Looking ahead, the bulls may have their sights set on a retest of the $150 level. However, they must first overcome the initial resistance at $117, as shown by the upper Bollinger Band indicator. A breakout above this level could open the door for a move towards the $150 target. On the downside, if the bulls fail to hold above $85, the optimistic price forecast could be invalidated. Nevertheless, there is support around the $90 level that could prevent a significant decline.
Overall, SOL’s recent price movements and staking trends suggest the potential for a further upswing in the coming weeks. With positive market sentiment and reduced supply, SOL could be well-positioned for a bullish breakout towards $150.
