Why Solana’s [SOL] Next Move Could Surprise You

What Could Surprise You About Solana’s [SOL] Next Move?

The resilience of the bullish investors in Solana [SOL] is currently undergoing a serious test. Despite making three attempts in less than a month to break free from a downward trend, the price continues to face difficulties and is moving further down the chart.

An analysis of its daily chart clearly demonstrates the significant impact of the “Trump pump” on investors, which drove Solana to its highest price in three years, reaching $264 after a period of stagnation.

Following such a strong rally, one might expect long-term investors to sell their SOL holdings, but surprisingly, this has not been the case.

Instead, it is the unwavering belief of these long-term investors that is fostering speculation about a potential imminent recovery.

However, with SOL having already retraced much of its gains post-election, there is a looming threat of a more substantial pullback, which may even weigh on the most steadfast holders.

It may only be a waiting game before the downward trend exerts its pressure and necessitates a decision.

The Clock is Ticking

Based on the chart data, the winners emerging from the election cycle are now evident, as indicated by the 30-day percentage change.

A surge of optimism swept through the market just a week after the election results, propelling some assets to notable gains.

Ripple [XRP] has notably excelled, surging past a significant psychological threshold with a triple-digit increase. Moreover, it has overtaken Solana to become the fourth-largest cryptocurrency based on market capitalization.

While Solana has lagged compared to its competitors, this does not signal the end of potential opportunities for the cryptocurrency.

Speculation surrounding a substantial recovery is gaining momentum, with predictions circulating that SOL could reach a price target of $500 by the end of the first quarter of the upcoming year.

Although the $500 target may seem ambitious given Solana’s recent price movements, historical volatility suggests that substantial gains are feasible. While making firm projections at this stage is premature, the realm of possibilities remains wide open.

So, Is it Worth Going “Long” on Solana?

The past three weeks have witnessed significant volatility for SOL, with bullish and bearish forces engaging in a robust struggle. Following a dip to $236, bulls staged a notable recovery, driving a 5% upsurge in just three days.

Participation from futures traders propelled Open Interest (OI) to an all-time high of $6.05 billion.

However, despite this rally, OI has subsided to $5.16 billion. For individuals considering a long position on SOL, caution is advised.

Although the present price levels might be appealing, SOL has struggled to attract the same level of attention as other altcoins that are currently seizing the limelight.

Nonetheless, all is not lost. Long-term holders are holding their ground, and with significant backing from influential players, a short squeeze could potentially reverse the prevailing sentiment.

Considering shorts dominating the perpetual market and capitalizing on weak accumulation, such a scenario could shift the momentum in favor of SOL.

Nevertheless, time is of the essence. If the bulls do not seize control promptly, long-term holders might lose confidence, potentially leading to a drop below $200 – a potential opening for strategic buyers to re-enter the market.