EXCITING PRICE ACTION TO DECIDE SOL’S DECEMBER MOMENTUM NEXT WEEK
Last week, when we published our most recent article on Solana Network’s native token, it was trading around the pivotal $216 level, and right now, the very same horizontal line is acting as its nearest resistance. However, the price hasn’t been in any sort of stagnation at all, quite the contrary, in fact, we have seen a whole lot of action from the coin in the chart.
The Black Friday Sale didn’t spare SOL (SOL/USDT), not even a little bit, and we saw the coin rapidly decline by up to 13% in value at one point during the day. Many potential investors as well as the current ones were ready to add the asset to their positions at the tastier prices with buy limits set around the critical levels of $200, 186, $175 and also $150. Those that had got in at the first two prices mentioned can count themselves lucky, as the token bounced off the $183 last Friday and $183 last Sunday, but that was about it from the Bears as they couldn't’ bring down the value of Solana any lower.
The buying pressure turned out to be too high, which only further confirmed the SOL’s newly acquired status of the ‘crypto darling’ as well as its reputation of one of the best performing smart contract platforms of 2021. Compared to last year’s prices on the 1st of December, the coin has grown by 11400%, which makes it the fastest appreciating crypto out of the TOP20, according to coinmarketcap.com.
When we look at a ranking of the current TOP 35 tokens by market cap, only AXIE INFINITY (AXS/USDT) has yielded higher (+23065%), and we will be publishing an extensive article on it this Thursday as part of our own weekly Metaverse Series. New, let’s turn to the chart to find out what’s in store for this week.
Right away, the very first thing that we see in it is a descending triangle, which has originated from the end of October. A pattern of this type is commonly seen as a bearish one due to a series of lower highs, which obviously indicate a weakening buying pressure. Although, there are also top traders who consider the descending triangles as neutral patterns in an Uptrend, which is exactly a kind of situation that Solana has been in on a long-term scale.
In our opinion, this particular price pattern is fairly likely to break to the upside for a couple of reasons at least. First of all, the bottom of this Triangle ($186) has been a very dependable support level for a greater period of time than the pattern has itself existed. Second of all, the three previous instances of the increased selling pressure have clear explanations (07 Nov - ‘’sell the news effect’’; 15 Nov – Bitcoin bringing down the entire market & 22-24 Nov – The Black Friday Week; ).
These three ‘sources’ have ceased to exist now, so SOL might easily have a clear path ahead for the continuation of its long-term rally. Additionally, the asset showed a clear signal of strength yesterday regaining the 50-day Simple Moving Average, which it lost last Friday. The previous time when SOL was below that short-term Moving Average was all the way back on the 31st of July.
Right now, Solana’s price action is seemingly getting a bounce of this MA, which makes a break from the triangle to the upside all the more realistic. RSI at 50 is neutral, but the MACD histogram bars are rising, which tells us that that the token might be able to continue its run towards new ATH values fairly soon. When No Black Swan.
Obviously, it first has got to break above the vital 216 level, which was SOL’s all-time high at the beginning of September, then it’s strong resistance on a couple of occasions in October, after which it became the coins decent support until The Black Week’s Wednesday. Best case scenario, once Solana breaks out from the triangle, swallows the $216 mark and closes a couple of candles above, then it should be ready to attempt to get above the current ATH of $260, as the price target would be above $285.
The Worst-case scenario (in the short to midterm), would see the token lose its $186 support, then break down through the 100-day Moving Average, which is presently @ $175 and ultimately put the $150 mark to the test. Actually, our worst-case scenario might, in reality, constitute a dream one for many investors as we should expect an avalanche of buy orders due to the current level of hype and institutional interest that SOL has enjoyed, especially since September.
One exciting piece of crypto news, which broke out on the 29th of November, was about the newly founded Greyscale Solana Trust that will allow high-net worth and institutional investors gain exposures to the hottest and, many believe, most technologically advanced smart contract platforms in the crypto space (and too centralized at the same time).
We shall wait and see if this announcement helps to propel the price to its new highs in the coming weeks. Another extensive update next week, so stay tuned to cyptodaily.co.ok. Until then, Happy trading!
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.