Solana's Bullish Surge Amid Crypto Market Recovery and Network Updates
Summary:
Solana's price has surged in the broader cryptocurrency market rebound following recent downturns, recording an 8% increase in the last 24 hours. This growth is attributed to Hong Kong's initial approval of Bitcoin ETFs and positive sentiments towards April's Bitcoin Halving event. Solana has also launched a solution to its ongoing network congestion problems, resulting in a significant rise in Solana-based meme cryptocurrencies. However, if Solana's price remains below its 50-day EMA, risk of a price correction increases.
The cryptocurrency market is witnessing a robust turnaround, with Solana (SOL) at the forefront, observing an 8% upswing in the last 24 hours and a 31.35% surge from its recent low of around $120. The recovery follows the crypto market's worst week since June 2023, instigated by Iran’s weekend drone strike on Israel. For perspective, the aggregate cryptocurrency market grew by 3.5% daily and 13% from its lowest level during the same period.
The recovery in the crypto market has been largely influenced by several primary factors. Firstly, it comes on the heels of the initial approval of Bitcoin (BTC) spot Exchange Traded Fund (ETF) products in Hong Kong. Secondly, market sentiment remains optimistic about the imminent Bitcoin Halving event in April.
The rising SOL price corresponds to Hong Kong's preliminary approval for asset management entities to commence Bitcoin and Ether ETFs. This has also been complemented by a 30.5% swell in the altcoin market since the US regulatory clearance of nine Bitcoin ETFs on January 11. Regarding this development, Andrew Kang, co-founder of Mechanism Capital, posits that the launching of Bitcoin ETFs may stimulate altcoins to perform "much better." He explains that as Bitcoin escalates slowly over long durations, the lesser volatility draws fewer traders, but the upward trend boosts confidence in a brighter future for the entire crypto realm.
In other updates, Solana is set to launch a solution to its ongoing network congestion problems. Infamous for a 75% drop in transaction success in March, the blockchain experienced increased transaction volumes of up to $4 billion during the same month. This marked a significant increase from its average daily transactions of under $500 million throughout 2023. To counter these issues, the first in a series of updates planned, Version 1.17.31, was launched on Monday. Consequently, Solana-based meme cryptocurrencies have witnessed a significant rise in the last 24 hours.
Solana's current price uptick forms part of a recovery trend that started after the cryptocurrency found support from an upward trendline dating back to November 2023. Solana’s daily relative strength indicator (RSI) recently dropped to around 31, which is one point above the oversold level; this is typically seen as a buying signal as it indicates that the asset may be undervalued and could rebound.
In the event of this anticipated rebound, Solana targets a recovery to its 50-day exponential moving average (EMA; at an estimated $160.75) by April. If Solana’s price breaks that point, it is likely to rise further to coincide with the level above 0.382 of the Fibonacci retracement. From a fractal analysis standpoint, Solana might be eyeing a target of approximately $255 by June, which would be a 65% increase from the current values.
However, the flip side is that if Solana's price remains below 50-day EMA, the risk of a price slackening towards its 200-day EMA support (at approximately $107.28) increases by April or May.
This news piece is meant for informational purposes only and is not intended as investment advice or recommendation. As every investment and trading decision involves risks, readers are advised to conduct research on their own before drawing any conclusions.
Published At
4/15/2024 2:30:35 PM
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