The Current State of Solana (SOL) Price
Solana (SOL) has demonstrated a noticeable loss in momentum, reaching its highest level in the past 15 months at $68 before experiencing a recent pullback. This decline was triggered by market concerns following Bitcoin’s failure to surpass the $38,000 resistance, leading to a downward turn. The question arises: has SOL reached an overbought zone at $68, or is the potential for recovery still intact? Let’s delve into the details.
The Striking Movement in Solana’s Price
SOL’s price embarked on a recovery journey from $17.78 in September. Within a remarkable 10-week period, the altcoin witnessed a parabolic recovery, soaring to $68.2, marking a staggering 293% increase.
Throughout this period, buyers in SOL successfully surpassed the daily Exponential Moving Averages (EMA) at the 20, 50, 100, and 200 levels. Important price levels, such as $30 and more recently $48, were also overcome. However, following the peak at $68.2, SOL experienced a pullback to $56.9.
This correction might lead to a retest of the support level at $48.3, aligning with the 38.2% Fibonacci retracement level. Yet, as long as SOL remains above the 50% retracement level at $43, the uptrend is expected to continue.
Therefore, a rally post-correction could help sustain the uptrend, supporting the continuation of the recovery with a rolling bottom formation. Potential price targets for SOL, with the support of this formation, include $78.2, followed by $100 and $143.
A Significant Increase in New Wallet Addresses
The number of new wallet addresses created daily on the Solana network serves as a crucial indicator of network activity and potential growth. From September 17 to November 17, the number of new wallet addresses created increased from 193,000 to 336,000, signaling heightened participation and interest in the Solana network. This surge in new wallet addresses typically indicates high demand for SOL and wider adoption of the network.
Furthermore, the upward slope of the 20-day Exponential Moving Average (EMA) during a potential pullback in SOL’s price highlights it as a significant support. The Average Directional Index (ADX), currently at a high level of 74, suggests a possible exhaustion of bullish momentum, indicating a potential need for a decline in SOL.