The overall cryptocurrency market is seeing red today, with major coins Bitcoin and Ethereum dropping around 3-4% over the past 24 hours. However, one altcoin has bucked the downtrend and rallied strongly – Solana’s SOL token.
SOL has surged over 8% in the last day, making it the only top 10 cryptocurrency recording gains. It is currently trading at around $56, having briefly surpassed the $59 level that analysts have highlighted as key resistance.
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What’s Behind Solana’s Rise?
Much of Solana’s recent meteoric rise has been attributed to surging interest from both retail and institutional investors. Data from Coinbase reveals the exchange has seen significant inflows into SOL, with order sizes suggesting major buyers are entering the market.
Institutional asset manager VanEck has also published a bullish report on Solana, with a price target of $3,200 per SOL by 2030. The network’s ability to support dapps with over 100 million users is cited as a key driver of growth.
Is a Reversal on the Cards?
Despite its impressive gains, some analysts warn that SOL’s parabolic advance could be due for a pullback. The long upper wick on its most recent daily candle suggests sellers jumped in to react to excessive buying pressure.
Solana daily chart, source: CoinStats
Key resistance around the $59 level may also encourage profit-taking in the short term. Furthermore, on-chain data indicates whale wallets linked to FTX have transferred large amounts of SOL to exchanges like Binance, which could presage increased selling pressure.
With SOL up over 145% in the past month, technical indicators like the 3-10 day MACD stalling near $57 add to the case for a temporary reversal. However, the altcoin remains firmly in an uptrend on the yearly timeframe.
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The Wider Market Outlook
Outside of Solana’s exceptional performance, the overall crypto market remains depressed today. Bitcoin has dropped 3% to trade below $35,400, while Ethereum is down 3.7% to under $2,000.
The total market capitalization stands at $1.36 trillion, having declined 3.38% over the past day. With SOL bucking the dip, traders will be watching closely to see if the altcoin can sustain its uptrend if the broader decline continues.
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