As a seasoned crypto investor with a knack for spotting trends and reading market signals, I find myself quite optimistic about Solana’s future. The recent breakout against Ethereum is not just a technical feat, but a testament to Solana’s growing strength and appeal.
The price of Solana has rebounded recently, contributing to a 4.5% increase across the entire cryptocurrency market in the last day. It even reached over $150, but then fell back to its current value of approximately $149. Notably, Solana’s price against Ethereum has also increased significantly, often indicating better performance in the future. This growth occurred amidst allegations that Solana is centralized. So, what can we expect for Solana in the near future?
Why is Solana Price Breaking Out Against Ethereum?
In the past year, Solana’s price has consistently surpassed Ethereum’s. Specifically, Solana has increased by 4.29%, whereas Ethereum’s price has decreased by 18.46% when compared to a year ago. Factors contributing to Solana’s strong performance include the surge of meme coins on its platform due to Pump.fun and its ability to maintain low fees and high network speeds, even during periods of intense network usage.
Conversely, Ethereum’s persistent issues with high fees and slow network speeds, coupled with recurring negative net flows in its U.S. spot ETF, have inadvertently boosted Solana’s price. This predicament positions Solana as a preferred choice among blockchain networks.
During the week of July 23, 2024, when the spot ETF started trading, data from DeFiLlama indicates that Ethereum’s share of the total TVL decreased from 62.38% to 54.94%. In contrast, Solana’s share grew significantly from 4.14% to 6.56%, suggesting that the unfavorable ETF volumes might have shaken investor confidence in Ethereum, causing them to move their investments towards Solana instead.
Consequently, SOL price has increased by 6.39% since June 20, while Ethereum has dropped 30.13%
Additionally, it’s worth noting that Ethereum has faced criticism from figures like Justin Bons, CIO of Cyber Capital, who argues that the L2 (Layer 2) networks on Ethereum are draining resources from the L1 (mainnet).
SOL Price Analysis: Is $180 The Next Stop?
The pattern in Solana’s price suggests a significant bullish turnaround, known as an inverse head-and-shoulders formation. As we near the neckline approximately at $160, a surge above this level would serve as confirmation of this reversal. This change in market trend from bearish to bullish is evident through the strengthening bulls, as indicated by the increasing buildup toward the right shoulder in the price action.
As a researcher examining Solana’s price movement, I foresee potential resistance levels for the asset. The first significant resistance could be encountered near the neckline of the inverted head and shoulders pattern, approximately at $160. A breakthrough above this level might propel the price further up to around $180.
As a market analyst, I’ve noticed an intriguing development: The price of Solana has outperformed Ethereum, demonstrating potential gains of approximately 18%. This could potentially lead to a mass exodus of investors from Ethereum towards Solana, which in turn might escalate both its Total Value Locked (TVL) and price to new heights.
If the Solana (SOL) price doesn’t manage to surpass the horizontal resistance line (the neckline), this could indicate a lack of market strength, potentially leading to a drop in price towards $148 – a key support level where the price previously rebounded, creating what is known as the right shoulder in a potential reversal pattern.
If selling intensity continues, the price might drop down to $140, which represents a two-month low so far. Beneath this point, at approximately $110, there lies a significant support level for the long term.
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2024-10-07 10:02