Crypto trader Lark Davis says five fundamental factors are fueling the meteoric rise of the smart contracts platform Solana (SOL).
In a new video, Davis tells his 427,000 YouTube subscribers that SOL is exploding because developers are actually building on its blockchain.
“Builders are actually showing up… You got to have stuff built on your blockchain. Otherwise, you’re a ghost town. Solana is definitely not a ghost town. We have loads of applications built on Solana [that] you can actually go out [and] use right now, today…
For example, you have Port Finance (PORT). That’s one of Aave’s competitors that we’re seeing come up on Solana. We have Mercurial Finance. That’s like Ethereum’s Curve Finance. It’s a stablecoin-swapping protocol. We have Radium (RAY), which is like Uniswap (UNI).”
The rise of non-fungible tokens (NFTs) is also contributing to the growth of Solana, according to Davis.
“NFT has been a massive trend recently. Solana’s got a lot of NFTs, too. That’s been part of what has been driving the demand: to get the main Solana asset, the SOL token, because people want to go and buy NFTs on Solana, which are priced in Solana.”
Davis says Solana’s financial situation is also helping fuel the token’s rise. The company raised $314 million in June to bolster its decentralized finance (DeFi) ecosystem.
“Part of the reason we’re seeing so many developers committing to the SOL ecosystem right now – they’re getting money. They’re getting grants. They’re getting a lot of investments…
So it’s $314 million, plus the backing of FTX, which having a cryptocurrency exchange that big, that’s like [having] more money than God.”
Davis says that large financial institutions are also starting to take an interest in Solana.
“Institutional money is starting to take a interest in Solana. Osprey, they announced a Solana fund two weeks ago. They are far from the only big-money players piling into Solana right now.”
Davis also looks at the total value locked (TVL) in Solana’s ecosystem, which has exploded to over $5 billion. The Crypto trader predicts that Solana’s TVL will continue to grow as market participants seek to provide liquidity and generate yields without paying hundreds of dollars worth of transaction fees.
Solana Analysis: SOL shoots up and could hit US$340
What to expect from this cryptoactive from now on and how to position yourself in it to get another high is what we’ll see in today’s analysis.
Let’s start by looking at the weekly chart where we see a large bullish channel formed and tapering off. If we have a movement following this channel, the SOL token may still be worth US$500 dollars over the next few months.
If we analyze the current big uptrend, we see that SOL has reached all Fibonacci levels and is currently struggling to break yet another resistance, if broken we can see SOL reaching US$340 over the next few weeks.
As long as we don’t break the long-term trend that formed the channel on the weekly, we shouldn’t see relevant bearish movements in this asset and any strong correction that keeps the SOL above the bullish channel could be a buying opportunity in this asset thinking in the medium term.
Solana is now the fifth project in the rank of cryptocurrencies behind only Tether and Binance Coin which shows that SOL has the potential to be the top 3 as it is a much more decentralized asset than those above despite its recent problems.
If you are looking for a moment to enter this asset, it is important to pay attention to the 4-hour chart where the asset has been making a breakout movement of the LTB (downtrend line) and may make a pullback giving an opportunity to buy.
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Solana(SOL) Price Appears Promising, $300 Target is Incoming Yet $500 Is Imminent
Many altcoins have gained bullish momentum and flipped the bears in the past couple of days. The bears had dragged most of the cryptos below the support levels, yet the fresh surge uplifted the price. However, Solana price following the bullish trend is testing one of the important zones. A successful breach through these levels could lead the SOL price on fire that may hit $300 by the EOY.
Solana maintained a considerable bearish trend for the whole of November and hence when the Bitcoin price ignited a trend reversal, SOL followed. At present, the asset has broken the resistance which connected all the tops in the past couple of weeks. Therefore the potential target in the short-term remains between $240 to $260. However, the upper target for the price still remains much distinct.
The asset always maintained a stable rally and recovered quickly after experiencing notable pullbacks. Currently, after attempting to breach the important resistance at $241, the asset faced a rejection multiple times. And hence formed a double bottom pattern that appears to form yet another bottom soon.
The bears seem to have been preparing to extract their profit and hence a small drop could be well in place. The corrections may prevail around the local support levels at $212. This is when the Solana price may get a nice boost to rebound with maximum strength. And eventually, uplift the price above $250 very soon. Yet $300 still remains the target to be achieved in the short term, and amid the bull run, the SOL price may rise as high as $500.
Solana price positioned for new bull rally towards $275
- Solana price breaks out above bull flag, indicating uptrend continuation.
- Moving and holding above $220 is essential to continue bullish momentum.
- Failure to extend higher here could see new monthly lows.
Solana price has hugged the top of the Cloud (Senkou Span A) as its primary support level for the past week. The respect of Senkou Span A as support has resulted in Solana moving and closing above one of the two Ichimoku levels necessary to confirm a new uptrend.
Solana price must close above the $220 value area before testing $275
Solana price is up against its primary and final Ichimoku resistance level on the daily Ichimoku chart. The Kijun-Sen within the Ichimoku system represents medium-term support and resistance and is the primary level for intraday and intraweek trading strategies within the Ichimoku system. The Kijun-Sen at the $220 level is precisely where Solana finds itself pushing against.
A daily close of Solana price above $220 provides more protection from near-term downside movement than it does upside potential for a couple of reasons. First, a close above the Kijun-Sen would convert the Kijun-Sen from a resistance level to support. Second, because retests of breakouts from bull flags are extremely common, the combination of the Kijun-Sen and top of the bull flag create a double-support structure.
SOL/USDT Daily Ichimoku Chart
Solana price does have downside risks. The Composite Index has created a high above the previous high peak on November 21st, while the candlestick chart shows the current daily high is lower than the November 21st high. This creates a condition known as hidden bearish divergence – a warning that the current drive higher may fail.
It is essential that Solana price close above the November 21st open of $217, or the hidden bearish divergence may push Solana back into the bull flag and likely even lower to test the bottom of the Cloud (Senkou Span B) at $184.