Over the past year, Solana [SOL] has emerged as one of the best performing digital currencies. Few other top tokens have managed to match its impressive growth and resilience in bouncing back from significant declines. However, the question remains: can the same pattern repeat itself in the current market conditions?
Since the final week of August, bears have been in control of SOL as overall market sentiment took a hit. As a result, SOL has now reached a critical price level, hovering around $120, a level that has consistently served as a strong support over the past six months.
Lately, SOL’s price has shown signs of stability above this crucial level, particularly during the initial days of September. The decrease in selling pressure indicates a possible accumulation phase underway.
An analysis of the demand for SOL revealed a notable increase in net long positions to over 18 million NLs at the $128 level, indicating a shift in market sentiment favoring the bulls.
Despite a positive outlook, there is a risk of significant liquidations that could drive prices lower. A recent leverage shakeout occurred when the price dipped below $128, reaching the support threshold.
Is SOL Poised for a Solid Rebound Amid Altseason Growth?
Alongside the observed consolidation, SOL might benefit from increased liquidity with the current uptrend of altcoin season. The dwindling trend in Bitcoin dominance over the past five days suggests a growing interest in alternative cryptocurrencies.
SOL has stood out as an appealing altcoin this year, making it a prime target for investors seeking lucrative opportunities.
Although Solana transactions and on-chain volumes have displayed a decline since late August, recent on-chain data hints at a surge in on-chain activities, especially a rise in transactions towards the end of the previous week.
During the same period, there was a slight uptick in volume. Despite the bearish tone in SOL’s price during that time, the increased activity suggests a spike in accumulation.
If the altseason gains momentum, the Solana network is likely to witness heightened activity. This could lead to increased transaction volumes and a surge in demand for SOL within the network’s DeFi ecosystem.
Such a scenario could pave the way for a robust recovery, akin to SOL’s past performance in recent months. A potential rally could push prices higher by at least 15% to 20% from the current levels towards the next major resistance point.
This indicates that prices might surge above $160 in the coming days if a strong bullish momentum ensues.