Solana’s (SOL) price has faced notable volatility in recent weeks, struggling to overcome resistance at $160. After multiple failed attempts to breach this level, SOL experienced a significant 20% drawdown towards the end of August.
This decline has left many investors cautious, but recent shifts in behavior suggest a potential rebound. Key indicators now point to a possible resurgence in Solana’s price, raising optimism among traders and analysts.
Solana Could Be on the Verge of a Rally
A key factor in assessing Solana’s potential recovery is the recent negative turn in the funding rate. This metric, which tracks the cost of holding positions in the futures market, often signals shifts in market sentiment.
Brian Quinlivan, Lead Analyst at Santiment, noted in an exclusive analysis for BeInCrypto that the funding rate is turning negative. This indicates that the bearish sentiment may be reaching an extreme, which sets the stage for a rebound.
“SOL has always been very sentiment driven, so we’re keeping an eye on its Binance funding rate. Ideally, we see traders trying to short (bet against) the asset, and those liquidations can be a good catalyst to start its next rally. Right now, there has been a pattern of increasing shorts,” Quinlivan told BeInCrypto.
Read more: 11 Top Solana Meme Coins to Watch in August 2024
Furthermore, the Chaikin Money Flow (CMF) indicator, which measures the cumulative flow of money into and out of an asset, has established a notable pattern for SOL. Historically, whenever the CMF dips to -10.0, Solana tends to bounce back within seven to ten days. This pattern suggests that recent declines could be temporary, with increased inflows potentially driving the price up in the near future.
Moreover, the broader macroeconomic factors also influence Solana’s price trajectory. Thus, if institutional interest and market participation continue to grow, SOL stands to benefit from these positive trends. This reinforces the case for a potential price rebound.
Solana Price Recovery: $160 Soon?
Currently, Solana’s price is trading at $132 after bouncing back from the support level of $126. For SOL to resume its upward trajectory, it must break through the local resistance at $137.
Achieving this would pave the way for a push towards the $160 mark. Historical data shows that Solana has experienced similar consolidation phases between $126 and $160, suggesting a rise to this level could be next.
The factors supporting this forecast are substantial, given that in the past, SOL around $126 has led to subsequent price increases. If SOL maintains its gradual upward momentum, the range-tested level of $137 could act as a springboard for further gains, making a rise to $160 plausible in the coming days.
Read more: Solana (SOL) Price Prediction 2024/2025/2030
However, Solana has been hovering under the $137 resistance level recently. If SOL fails to breach this barrier, it might continue its sideways movement. This stagnation could dampen the bullish sentiment and potentially invalidate the optimistic price forecast.
Disclaimer
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