Solana Price reached a STRONG SUPPORT – Should you Buy SOL?
The crypto market crashed hard lately. Despite the continuous bear market that’s been going on since November 2021, this past week was a harsh one. Most cryptocurrencies lost more than 20% on average. Solana price in particular lost as much as 50% and was heavily dumped by many traders. The current price of SOL is very critical as it stands on a strong support area. Is this a good time to buy Solana? In this Solana Price Prediction, we analyze SOL from a technical standpoint.
What is Solana Crypto?
Solana is a decentralized blockchain. It is developed to facilitate scalable, user-friendly apps. Solana’s native cryptocurrency is SOL. The SOL has received a lot of attention in recent days, notably during the current crypto rally. SOL runs just like how ETH works on Ethereum. The only difference is that the SOL holders stake the token to verify transactions within the PoS consensus mechanism. It also allows users to engage in governance methods, earn bonuses and pay gas fees. Solana is a single-chain, delegated-Proof-of-Stake.
The benefit Solana has over other blockchains is that it enables the blockchain to run efficiently despite network activity. In addition, Solana utilizes Cloudbreak, a shared log that blocks transaction history from using too much computer space.
Why is Solana price down?
The current crypto crash did not spare any token, even stablecoins such as UST were put to the test. There are many reasons that contribute to the collapse of cryptocurrencies. The main one is a general outlook of cryptocurrencies, which shows how the crypto market has been on an uptrend ever since early 2020. In figure 1 below, we can see how the cryptocurrency market has been on a nonstop uptrend. So a natural adjustment in prices was overdue after an extended period of price increases with little to no retracements.
Other macro fundamental reasons also contribute to the collapse of Solana among all cryptocurrencies:
- Limited crypto regulations
- Correlation with an overbought and adjusting stock market
- Security breaches, hacks and rug-pulls
- Ukraine war
Many other mishaps happened in the crypto market, including bad ICOs, congested blockchains, gas fee problems, and others. When the market tries to recover, another problem gets slammed in the face of investors. The above points are just the tip of the iceberg. They made the crypto market crash by more than 50% since the beginning of the year 2022. Solana is currently at a critical price of around $45 after recovering from a slump toward $34.
Will Solana Recover soon?
The main factor that would help Solana price recover is the recovery of the global cryptocurrency market. Even if there was a breakthrough in Solana’s technology or strong fundamental news relating to Solana, it won’t make any significant positive impact. As an example, we can look at the Tron project, which recently launched its algorithmic stablecoin USDD. Prices of TRX slightly increased before collapsing with the crypto market. However, this helped in hedging a total collapse, as TRX barely lost 10-15% since the heavy crash.
For Solana specifically, prices might recover from this 50% slump in prices only if the market shows some signs of consolidation or comeback. At this stage, the former is more likely.
Solana Price Prediction – Where will Solana price reach?
The current price of Solana falls on a strong support level. If we look at figure 3, we can clearly see the previous resistance turn into a current support delimited between $35 and $45 (green lines). Should the crypto market bounce back and recover in the coming weeks, Solana prices can easily recover towards $80, making a little less than %100 in returns.
However, should the crypto market continue to collapse, Solana prices can continue dumping towards $22 (yellow line).