Solana [SOL] has shown a strong recovery after its recent downturn, currently trading at $190.04, hovering near a crucial support level.
Over the last 24 hours, the cryptocurrency has experienced a 4.91% price upsurge, despite a 11.43% drop in the last seven days.
During the 24-hour period, SOL’s price traded within the range of $180.35 to $192.86, indicating a phase of consolidation. Meanwhile, the weekly low of $176.72 showcases solid support near the lower end of the Bollinger Bands.
Forecasts point to a recovery based on technical indicators
As per the daily chart, the TD Sequential indicator has issued a buying signal, which hints at a potential price rebound. Crypto analyst Ali (@ali_charts) mentioned,
“This signal often precedes robust bullish momentum, presenting an opportunity for long positions at these levels.”
Source: X
Per the daily chart analysis, the Bollinger Bands suggest oversold conditions, with SOL trading in proximity to the lower boundary at $176.52. Resistance levels are noted at $213.88, corresponding with the midline of the Bollinger Bands, and $251.24, marking the upper boundary.
A breach above these thresholds could trigger further momentum, while a drop below $186 might lead to a descent towards $165, a historically significant demand zone.
The Average Directional Index (ADX) presently sits at 33.39, affirming the strength of the prevailing trend. Although a bearish trend has been evident recently, the ADX level implies that any breakout above resistance could fuel a vigorous upward movement.
Traders are closely monitoring the $186 level as an immediate support zone.
Source: TradingView
Strong underlying factors support Solana’s expansion
Solana’s network fundamentals exhibit strength, with its Total Value Locked (TVL) reaching $8.312 billion, showcasing a 1.83% increase in the last 24 hours.
The stablecoin market capitalization stands at $4.972 billion, with $3.08 million generated in fees and $1.54 million in revenue within a day.
There is a notable surge in activity on Solana’s decentralized exchange protocols, surpassing Ethereum (ETH) and other competitors in December, with a trading volume surpassing $97 billion compared to Ethereum’s $74 billion.
The platform hosts 4.16 million active addresses, processing 70.34 million transactions in the past 24 hours.
Increasing interest in the derivatives market
Recent data from Coinglass indicates mixed signals in the derivatives market. Open interest rose by 8.85% to $4.68 billion, while options volume surged by 301% to $10.1 million, reflecting heightened speculative activity.
The Binance long/short ratio for top traders is bullish at 5.07, indicating a bullish sentiment among most traders.
Source: Coinglass
Despite the positive outlook, trading volume experienced a 6.81% decline to $9.24 billion, implying caution in the market.
Liquidation data demonstrates a balanced scenario, with $4.89 million in long liquidations and $4.52 million in shorts, indicating a deadlock between bullish and bearish forces.
Considering Solana’s technical configuration alongside robust network activity, there is potential for recovery if crucial resistance levels are breached.