Solana Led Major Cryptocurrencies Lower Today—Where Is This Digital Asset Headed Next?
Solana’s sol token, which has fallen close t0 90% from its all-time high, led major digital currencies lower earlier today.
The cryptocurrency, which powers the high-performance Solana blockchain network, reached as little as $30.43 at roughly 10:45 a.m. ET, Messari data shows.
At this point, the digital asset had lost roughly 4.7% of its value in 24 hours, suffering the biggest decline of any of the top 10 digital currencies, which were mostly in the red at the time, additional Messari data reveals.
Further, sol was down approximately 88% from its all-time high of close to $260.00, a zenith it attained in November.
Since then, the cryptocurrency has bounced back somewhat, trading around $31 at the time of this writing.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Technical Analysis: A Bearish Picture
Going forward, the highly visible digital currency, which managed to climb over 15,000% in 2021 before plummeting, could face a difficult situation in the short-term, according to technical analysts.
MORE FOR YOU
“Despite its own fundamentals, SOL is following the broader market, especially ETH, and is currently close to a weak support level of $30,” said Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital.
“Further downward pressure is likely to see SOL testing the bigger support range between $26 – $19, and we would expect relief there,” he stated.
Marouane Garcon, cofounder of cross-chain decentralized exchange WhaleSwap, also offered some input on the situation.
“I think in the short term it’s going to continue to go down,” he predicted.
“The moving averages suggest a strong sell, but like I said I think that’s in the short term.”
Should the digital currency appreciate, it will encounter resistance, and analysts pointed out several levels where this could materialize.
“On the upside, $35 is the first major resistance, followed by $45,” said DiPasquale.
“However, in current conditions, rallies are unlikely to have sustained momentum and we would very likely come back to revisit lows at some point,” he noted.
Brett Sifling, an investment advisor for Gerber Kawasaki Wealth & Investment Management, added further detail.
“A break of the ~$50 recent high in August would be very encouraging for the bulls,” he emphasized.
“However, the bulls would still face major resistance at $60 and again at $80. A break of both of those would suggest that the brutal downtrend has been broken,” Sifling stated.
Solana’s Bullish Long-Term Outlook
When one evaluates the prospects of the sol token and the Solana blockchain network over a longer time frame, the situation appears brighter, according to several market observers.
“There’s so much being built on Solana. The number of developers building on Solana is nothing short of incredible,” Garcon emphasized.
“I’m very long on Solana,” he added.
“They have the developers, the innovative protocols, the investors, and the community. That’s what you need to have a successful blockchain today.”
Sifling also chimed in, noting that “There has been an uptick in VC funding to Solana projects, mostly in the gaming space. I think there will be a major play-to-earn game built on Solana that should bring some attention back to that blockchain.”
He also spoke to the recent proposal floated by the Helium core developer team, which would migrate the Helium Network to Solana.
This plan “would allow the Helium ecosystem to achieve higher uptimes, greater composability (interactivity with other crypto projects), and a faster user experience while maintaining the security and low cost of using the Helium Network,” according to a Medium post published by the Helium Foundation.
“Hearing that entities like Helium are looking to migrate to a L1 like Solana is certainly encouraging, as it shows the strength of scalability and tools available to the developers on the platform,” noted Sifling.
Garcon offered a summary of the Solana network’s situation, providing a highly optimistic outlook.
He predicted that over time, the network “will be as big as Ethereum and BNB Chain.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.