Solana Price Analysis: SOL Regains Momentum After Falling Below $120
Solana (SOL) is showing signs of recovery after a brief dip below $120. The crypto market is experiencing a bullish wave, giving investors hope after a tumultuous sell-off earlier in the week. To sustain this momentum, SOL needs to close above $140, as it indicates a renewed sense of confidence among investors.
Crypto Market Rebounds Amid Optimism
Thursday’s market surge has injected positivity into the cryptocurrency space, with SOL leading the charge with a 10% increase in its value over 24 hours. The broader market is also reflecting this bullish trend. At the end of Thursday’s US business hours, Solana was trading at $136, supporting the overall positive sentiment in the market.
The crypto market’s cumulative valuation has grown to $2.31 trillion, a 1.4% increase during the same period, according to data from CoinGecko.
Bitcoin and Ethereum Also See Gains
Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies, are also on the rise. Bitcoin rebounded after testing support at $56,500, with a modest 2% increase, reaching $58,500 at the time of writing. Ethereum remains in the green but below its $3,000 support/resistance level.
Solana Price Begins Recovery
The Relative Strength Index (RSI) confirms the bullish momentum for Solana, which touched resistance at $140 in the last 24 hours. The RSI is currently at 54, indicating a growing interest among traders to hold SOL in anticipation of a further recovery in May. The aim is to close the gap to the $200 mark.
In Q1, a positive sentiment fueled by Bitcoin ETF launches in the US pushed SOL to a high of $209. The previous bull market in 2021 saw Solana peak at $260.
Key Levels to Watch for Solana
Traders should look for higher support, ideally above the 50-day Exponential Moving Average (EMA) at $136.8. SOL’s position above the previous day’s open at $134.4 adds credibility to the ongoing bullish trend. If the price can surpass the immediate resistance at $140, this will further boost confidence among investors.
The next resistance levels to monitor are at $150 and $160, with the 200-day EMA marking a significant hurdle at the $150 level. Based on the trading volume, which has soared to $4.2 billion, it’s clear that interest in Solana is increasing among traders. If the trend continues, SOL could see additional gains before encountering stronger resistance.
Solana’s DeFi Total Value Locked (TVL) Is Falling
However, there are some concerns. Data from DeFi Llama reveals a notable drop in the Total Value Locked (TVL) in Solana’s decentralized finance (DeFi) smart contracts, down to $3.78 billion from a recent high of $4.89 billion. This decrease could signal a shift in investor sentiment.
A falling TVL can indicate a potential long-term impact on Solana’s price. When TVL increases, it suggests confidence in the ecosystem, with investors willing to lock their tokens for network security and staking rewards. A downturn, however, may lead to more investors keeping their coins liquid, ready for potential sales. This could increase the selling pressure on SOL and impede future price growth.
