Solana (SOL) has been one of the top cryptocurrencies in the market, holding the fourth position by market cap. However, recent developments suggest that it may lose its spot to Ripple’s XRP. While SOL has been consolidating, XRP has surged by nearly 95%, surpassing Binance Coin to reach a market cap of $106.5 billion.
Technical analysis of SOL on the four-hour time frame reveals a bearish inverted head-and-shoulders pattern, indicating a potential decline if the $226 support level is not held. In such a scenario, SOL could see a 10% drop, possibly reaching the support level at $202. On the other hand, a four-hour candle closing above $245 could invalidate the bearish outlook.
Despite the bearish signals, there are positive indicators for SOL as well. The cryptocurrency is currently trading above the 200 Exponential Moving Average (EMA) on both daily and four-hour charts, signaling an uptrend. Additionally, SOL’s Relative Strength Index (RSI) is at 49, near the oversold region, suggesting a possible buying opportunity and potential for a rally in the coming days.
In line with technical analysis, on-chain data from Coinglass indicates strong interest from whales in SOL. A significant outflow of $182 million worth of SOL from exchanges to wallets since November 23, 2024, suggests that large investors are accumulating the token. This activity is viewed positively by the crypto community, hinting at a potential upside momentum for SOL.
As of now, SOL is trading around $240, with a slight price drop of 1.75% in the last 24 hours. The trading volume has also decreased by 3%, indicating reduced participation amidst the ongoing consolidation. Despite the short-term fluctuations, the overall sentiment remains bullish for SOL, with the potential for a price rally in the near future.
Overall, while SOL may be facing some near-term challenges, the underlying technical and on-chain data suggest that the cryptocurrency has strong potential for growth. Investors and traders are advised to closely monitor key levels and indicators to capitalize on potential buying opportunities and navigate the market volatility effectively.