- Solana’s price dropped by over 11% in the last 7 days
- Metrics and market indicators hinted at a price hike on the charts
As a researcher with extensive experience in the crypto market, I’ve seen my fair share of price drops and rallies. The recent 11% decline in Solana’s price over the last week left me feeling somewhat concerned, but I remain optimistic based on historical trends and current market indicators.
In current market conditions, it appears that most cryptocurrencies, including prominent altcoins such as Solana (SOL), are finding it difficult to display positive trends on their price charts. Nonetheless, from a broader perspective, there’s a possibility that the market could shift bullish relatively soon.
This is how it will play out, especially if the altcoins follow a specific historical trend.
History might repeat itself again
According to CoinMarketCap’s latest findings, Ethereum (ETH) experienced a price decrease exceeding 4% within the past week. Notably, other prominent cryptocurrencies such as Binance Coin (BNB) and Solana witnessed more substantial declines, with BNB dipping by approximately 11%, and Solana suffering a loss of around 12%.
As a researcher, I’ve come across an intriguing observation made by Moustache, a well-known crypto analyst. In his recent tweet, he drew attention to the fact that the current behavior of altcoins bears a striking resemblance to the market dynamics of 2016-17. During that period, the altcoin market cap hovered close to its previous high from 2012 for an extended timeframe before experiencing significant growth and hitting new record highs in 2017.
In 2014, the total value of altcoins hovered around their all-time highs from 2017. If historical patterns hold true, a potential repeat of this trend could mean that altcoins, such as Solana (SOL), may soon reach new price peaks.
Will Solana lead the altcoin rally?
After observing a dip in SOL‘s weighted sentiment on June 9th as indicated by Santiment’s data, AMBCrypto intended to examine the cryptocurrency’s on-chain information further to determine if it suggested an upcoming bull market.
Over the past few days, there’s been a surge in optimistic views towards the cryptocurrency token. Furthermore, the token’s social buzz continued to be robust, indicating its widespread appeal within the crypto community.
Additionally, the derivatives market showed promising signs for Solana beyond its price decline. Notably, open interest in SOL contracts saw a significant reduction.
When this metric experiences a decrease, it often indicates that a trend reversal is likely imminent. Additionally, there was a slight reduction in its funding rate.
Normally, pricing trends and funding rates exhibit opposite movements, implying a potential bull run based on chart analysis.
After examining SOL‘s daily price chart, we considered if technical indicators were signaling a potential bullish trend reversal. Based on our assessment, its Relative Strength Index (RSI) was still below the neutral threshold, yet it did exhibit a slight upward trend.
A similar pattern was also noted by the Chaikin Money Flow (CMF).
Based on current trends and the performance of these indicators and metrics, I, as a researcher, strongly believe that Solana, among other altcoins, has a high probability of reaching a new all-time high within the next few months.
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2024-06-16 02:15