With the Solana (SOL) price having dropped by around 5% on Monday as macro headwinds come in, traders are questioning whether the token might be able to recover from its recent crash.
The Solana price was last around $144, down sharply from earlier session highs above $156. However, the token is up 17% from its Saturday lows just above $120.
SOL dropped suddenly last week amid a widespread altcoin sell-off on concerns about war between Israel and Iran.
Concerns about a full-blown war breaking out eased on Sunday, facilitating a Solana price recovery.
But a rally in US government bond yields and the USD on Monday is currently weighing on the price.
However, a look at the Solana price chart with 4-hour candle sticks suggests a short-term uptrend may have formed.
The Solana price has formed a short-term uptrend. Could it soon retest $160, or will macro headwinds send it back towards $120? Source: TradingView
Assuming the market’s recovery continues, the next upside target will be resistance in the low $160s.
But it will be very difficult for Solana to break above here, given a multitude of risks.
Solana Price Prediction – Where Next for SOL?
Geopolitics could continue to weigh on the Solana price, and on the broader market. Israel could yet escalate its conflict with Iran in wake of the latter’s missile and drone attack on Saturday.
Moreover, the macro landscape continues to become more unfavorable for crypto in the short term.
In wake of strong manufacturing, jobs and hotter-than-expected CPI data out of the US this week, markets have been paring back on bets for Fed interest rate cuts in 2024, pushing US government bond yields and the USD aggressively higher in recent sessions.
This trend has accelerated on Monday in wake of more robust US data – this time a stronger-than-expected US retail sales report.
This has weighed heavily on risk assets that tend to perform well in an environment of falling rates/USD, like crypto.
A post-halving lull in the Bitcoin market may further deter the Solana bulls from chasing the price higher.
Bears might thus view $160 resistance as a great area to open some short-term short positions. Alternatively, those who caught the recent lows in the $120s may see this as a great area to book profits.
The Solana price could well be stuck in a $120-160 range for the foreseeable future.
The Solana price could be stuck within this $120-$160 price range for the foreseeable future / Source: TradingView
New All-Time Highs for Solana This Year?
While the short-term outlook looks rocky, Solana’s long-term prospects remain strong.
Most continue to view the current crypto bull market as far from over. Miner sell pressure may be elevated in the aftermath of the halving. But lower BTC issuance will eventually be a tailwind.
Spot Bitcoin ETF demand is likely to continue to underpin the market in the long term. That’s especially true with Asia set to join the fray – Hong Kong appears to have already approved spot Bitcoin ETFs, opening the door to a new wave of buyers.
And it remains likely that the Fed will eventually start cutting interest rates later in 2024 and into 2025. That should come as a belated boost to risk asset valuations.
All the while, strong growth in the Solana network is likely to continue as new users flock to the network.
As per data presented by The Block, the 7DMA of active addresses on the network remains in an uptrend.
The Solana price will continue to rise in the long-term assuming positive trends in network growth continue. Source: The Block
The same can be said for the 7DMA of new addresses on the network.
The Solana price will continue to rise in the long-term assuming positive trends in network growth continue. Source: The Block
And yes, Solana’s TVL has taken a dip in tandem with the recent drop in the SOL price. As per DeFi Llama, Solana’s TVL was last $9.5 billion, down from recent peaks near $13 billion.
The Solana price will continue to rise in the long-term assuming positive trends in network growth continue. Source: The Block
But the sharp uptrend since last October is likely to continue in the medium to long term.
Thanks to its low fees, fast transactions and fast-growing ecosystem of dApps, Solana will undoubtedly remain a top blockchain.
That means it remains highly likely that, at some point during the current crypto bull market, the Solana price will hit fresh all-time highs.
Investors dipping into the Solana market now could now reasonably expect 80% gains in the medium to long term. And potentially much more depending on how aggressively SOL breaks though its old record highs from 2021 around $260.
Exciting Solana Meme Coin to Consider – Slothana (SLOTH)
Solana is a high-conviction long-term play, with a good chance of delivering 2x gains.
But many crypto traders are looking for riskier bets, with much great upside potential.
Solana meme coins have been a big theme this year, with the likes of Dogwifhat and Bonk performing well. However, their now bloated market caps suggest trading looking for 20-50x gains will need to look elsewhere.
And an exciting new Solana meme coin called Slothana (SLOTH) has been gaining a lot of traction.
Still in its presale phase, Slothana has raised over $10 million. Unlike traditional presale campaigns, Slothana allows investors to directly send $SOL to the project’s wallet address in exchange for $SLOTH airdrops.
The token raised over $10 million and showed strong investor interest shortly after its official launch. A key reason for this traction could be the project’s central figure (an office Sloth tired of its 9-5 job) that resonates with many investors.
The presale is only running for another 13 days, so interest investors need to move fast.
Hold onto your branches, Slothana faithful! We’re gearing up to drop some major news: the official launch date is on the horizon! Get ready to mark your calendars and set your alarms, because a countdown timer will soon grace our site. Let the hype for the Slothana…
— Slothana (@SlothanaCoin) April 14, 2024
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