Solana (SOL): Significant Upside Movement Predicted by March Amid Fundamentals & Speculation
Summary:
Solana (SOL) is poised for a significant price increase by March, according to various technical and fundamental indicators. The anticipated breakout could see Solana reach around $194, representing an approximately 80% rise from current levels. Factors that may influence this include the possibility of a Solana ETF and expectations of a soft approach from the Federal Reserve. This bullish scenario could be further reinforced by a potential weak period for the U.S. dollar.
Indicators, both technical and fundamental in nature, point towards a substantial increase in Solana's (SOL) value by March. As of January 18, an assessment of SOL's pricing suggested a 'bull flag' breakout could occur. Such patterns, indicative of potential continued growth, are recognized through a price pattern that mirrors a downward sloping channel or 'flag' after a significant rise, or 'flagpole'. The resulting breakout typically occurs when the price crosses above the top trendline of the channel and often ascends to a height equivalent to that of the flagpole. Therefore, Solana could potentially break out above its flag's upper trendline and reach around $194, an approximately 80% increase from current values, come March.
However, if a reverse trend occurs from this upper trendline, SOL's value could retreat towards its lower trendline of around $80. Nonetheless, the value could stabilize along its 50-day exponential moving average (50-day EMA; highlighted by the red wave) near $87, a typical long-term support level. If it maintains within the flag's parameters, the likelihood of a breakout persists.
Excitement for a potential Solana ETF also continues to build, following the approval of spot Bitcoin ETFs on January 11. This has caused the industry to speculate about the possibility of other cryptocurrencies, including Solana, gaining a spot ETF in the future. Encouraging this speculation further is respected asset management firm, Franklin Templeton, who praised Solana for its progress in areas such as DeFi, infrastructure, NFT innovation, and memecoins.
Expectations of a softer approach from the Federal Reserve could also lead to a Solana price boost. The CME's Fed futures funds place the chances of a March 2024 US interest rate cut of 25 basis points at 59.5%. Lower interest rates generally result in a weakened U.S. dollar due to depreciated yields on dollar-pegged assets. This can benefit cryptocurrencies like Solana, commonly measured against the dollar, as the currency's weaker position often translates into a more valuable cryptocurrency.
Technical analysis of the U.S. dollar index (DXY) suggests a selling period in the coming days, possibly aiding Solana's price rise. There has been a rising wedge pattern visible since December 2023, the points of breakdown for which indicate its downside could be anywhere between 101.50 and 102.25. This ongoing reverse correlation between the U.S. dollar and Solana could further increase the likelihood of a substantial SOL rally by March.
Please note, this article does not provide investment advice or suggestions. Any investment or trading activity entails risk; thus, independent research should be conducted before making any decisions.
Published At
1/18/2024 3:20:00 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.