- Recent data indicated an uptick in long positions on SOL, alongside a hike in traders’ confidence
- Its latest pullback appeared to be part of a natural consolidation cycle, positioning SOL for a possible breakout on the charts
As a seasoned researcher with years of experience tracking the cryptocurrency market, I have seen my fair share of pullbacks and consolidation cycles. However, recent trends suggest that Solana (SOL) might be on the brink of a breakout. The overwhelming bullish sentiment among traders and the rising demand for SOL are strong indicators of its potential growth in the near term.
In the past day, Solana (SOL) dropped approximately 3.72%, which diminished its weekly gains to a mere 0.99%. Looking at the last four weeks, however, this digital asset has shown a rise of 11.96%, despite failing to maintain consistent growth momentum.
Based on AMBCrypto’s assessment, it appears that multiple elements could contribute to Solana’s (SOL) potential rebound. The asset might be poised for more growth in the short term.
More traders bet on SOL rallying
According to a recent analysis by Santiment, about 83% of Solana (SOL) traders are optimistic and making long-term investments in this asset. This percentage positions SOL in the top 2% (98th percentile), suggesting an extremely high level of faith among investors that SOL could yield significant returns.
When most traders express optimism (bullish sentiment), it frequently indicates a robust dedication towards the market, regardless of price changes. This pattern typically shows that they are prepared to keep holding the asset during volatile periods, which may trigger further price increases.
According to data from Coinglass regarding the SOL/USDT pair on Binance, it appears that the majority of both top traders and regular accounts are favoring long positions. The long-to-short ratios were 5.5833 for top traders and 5.1425 for general accounts, suggesting a significant bias towards buying over selling.
A higher long-to-short ratio, leaning more towards the ‘long’ side, usually indicates a generally optimistic view in the market. An abundance of long positions can potentially boost the direction and momentum of an asset’s growth trend.
Rising demand could propel SOL higher
Currently, there’s an increasing interest in SOL as large quantities have been withdrawn from exchanges recently, causing a noticeable decrease in Exchange Netflows.
Information from Coinglass indicated that over the past 48 hours, there was a withdrawal of approximately $112.29 million in Solana (SOL) from exchanges, suggesting a net outflow.
Collectively, these patterns imply that a significant number of traders and investors are shifting their investments towards personal wallets for long-term storage. This action generally decreases the available supply on trading platforms, causing increased demand, which can frequently lead to price increases.
One more reason for the rising popularity of SOL is the significant increase in its Total Value Locked (TVL), as reported by Lookonchain. In just the past week, Solana’s TVL has surged by a substantial $618.4 million, suggesting heightened activity across multiple protocols within its ecosystem, which is evidently a positive sign.
SOL forms a bullish flag pattern
Recently, Solana (SOL) has been observing a period of consolidation, creating a bullish flag formation on its chart. This pattern is often followed by substantial price increases.
In this current stage, the value of SOL has fluctuated between approximately $220 and $250. This suggests that major stakeholders and long-term investors are amassing their positions in anticipation of a possible surge beyond this range.
Should the bullish flag pattern continue, it’s possible that Solana (SOL) may reach $315, representing a significant increase compared to its current market value. Such a rise underscores the asset’s robust uptrend and increasing investor optimism.
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2024-12-10 11:36