The Solana (SOL) cryptocurrency has finished its third consecutive week on the rise, finding resistance near $150, as it has for much of this year.
As seen on the chart, this area has acted as resistance. on multiple occasions over the past six months. It has also acted as support at times when it managed to break above it in that period, such as in the last bullish cycle of 2021.
In this sense, The USD 150 area is positioned as a strong level in psychological terms for the SOL market. Therefore, overcoming this zone seems key to sharpening its rebound.
Resistance is a temporary zone of maximum prices due to a greater supply than demand, while support is an area of minimum prices due to a greater demand than supply. In technical analysis, it is common for the former to become the latter during upward trends due to the psychology of traders.
Over the past six months, SOL has been in a sideways corrective period above the USD 120 support. “This could turn into a rectangle capable of launching a considerable advance,” warns the renowned trader Peter Brandt, with almost 50 years of experience. This can be seen below.
The explanation behind the Brandt projection is that normally when a price moves within a rectangle on the chart for a long period of time it shows strength. It is common for this to occur after bullish trends to test support, which usually culminates in a breakout of this structure to the upside.
Based on the analysis of supports and resistances, The next targets for the SOL market could be USD 160 and USD 180. Such levels have proven to be solid floor and ceiling levels this year, so it would not be surprising if they are repeated if the upward trend is reactivated.
Meanwhile, SOL, which is the fifth-largest crypto asset by market cap, is 44% below its all-time high of $260 three years ago. This reflects a significant underperformance against bitcoin, which is 13% below its record high of six months ago.
What is driving SOL’s rise?
SOL’s weekly upgrade takes place amid a new initiative from its ecosystem, Solana. Play Solana pre-sale starts this weeka portable gaming console that offers rewards, like NFTs. If this project gains traction, it could encourage cryptocurrency adoption.
In addition, the US interest rate cut last week for the first time in more than four years is leading to greater liquidity in the economy. Therefore, Risk demand is expected to increase in the markets if a recession does not occur. This is something that cryptocurrencies like SOL could benefit from.
“The drop in rates generates liquidity, an availability of money, which suggests an increase in the demand for cryptocurrencies. Perhaps we will not see this liquidity immediately impacting the ‘crypto’ market, but it will undoubtedly emerge over time,” said Sebastián Serrano, CEO of the Ripio exchange, in a note sent to CriptoNoticias.
Therefore, the economic development and the Solana ecosystem are shown as key factors for the continuity of SOL in this scenario.
