Today, we analyze the possible scenarios of the price of Solana (SOL) in the short and medium term.
What Is Solana?
Solana is a highly functional open-source project that builds on the permissionless nature of blockchain technology to provide decentralized finance (DeFi) solutions. While the idea and initial work on the project began in 2017, Solana was officially launched in March 2020 by the Geneva, Switzerland-based Solana Foundation.
Solana is known in the cryptocurrency space for the concise processing times that the blockchain offers. Solana’s hybrid protocol makes it possible to significantly reduce validation times for the execution of transactions and smart contracts. With lightning-fast processing times, Solana has also attracted much institutional interest.
The Solana protocol intends to serve both small-time users and enterprise customers. One of Solana’s main promises to customers is that they won’t be surprised by increased fees and taxes. The protocol is designed in such a way that it has low transaction costs while ensuring scalability and fast processing.
- SOL touched $259.9 at the beginning of November 2021 but trended down again.
- The cryptocurrency has been down for six months after the failure in its hardware that generated a strike throughout the network.
- The FTX Exchange and the Alameda Research investment fund went bankrupt, these being large investors in Solana.
SOL has long been part of the TOP 20 market cap in the crypto world, its strong publicity has generated a wave of enthusiasts for this new technology.
Over the last 6 months, SOL lost approximately 95% of its value as it saw other global markets crash on fear of aggressive policies by Fed Chairman Jerome Powell.
After the new “all time high”, SOL swept away the accumulation zones of the enthusiasts who entered through FOMO; Coming to be in a dangerous area, among the big blackout of its operating system, SOL suffered greatly, the community still could not forgive her.
The black cat of crypto?
As if that were not enough, after the collapse of the market, it also suffered due to over-collateralization within the hedge fund “Alameda Research”, which after the bankruptcy, entered a process of liquidation of its balance sheets. SOL came out very hurt from that Sell-Off.
It seems to be in an accumulation at the moment, re-entering the previously tested zone. In movements of high volatility, it could define whether to continue higher or change its course to the downside.
The RSI is in a bearish area of 36.56%, following a bullish stochastic process. We expect a regression first and then continue on its way upwards.
In the crypto market, everything depends on BTC, a rise in Bitcoin would confirm our forecast on SOL for the coming weeks.
Although BTC is a risky asset, greater stability on the part of the FED in the December decisions and a reduction in inflation in Europe would foster the necessary conditions for the confirmation of this proposed scenario.
Bearish possibility on the horizon
It should not be ruled out. After all, these are projections based on the information we have so far, given new information, this bullish projection could be modified. Always putting good risk management before us, the worst scenario in this market is that the opposite of what has already been said happens.
It will be then, in the first weeks of December, before a new meeting of the FED, which could:
- Set aggressive market conditions, invalidating our previous analysis.
- Employment in the US could falter.
- Russia could not end up trading its commodities in Bitcoin, thus avoiding promoting unprecedented crypto adoption.
- Or even the general bankruptcy of European banks like Credit Suisse.
Whatever the scenario, we could be invalidated, after all, the market is always right, and given this scenario, the estimated target for SOL would be at the level of $6.58
Right now, the market is expecting not only the events related to the war (petrochemical supply) but the crypto adoption in Russia. As we mentioned before, the focus is on the FOMC meeting in December and a much less aggressive decision by the Fed regarding interest rates.
At the moment, SOL already wants to recover. All it takes is a relief to grow together with the rest of the altcoin market.
The information in this content should be taken for informational purposes only, not intending any point of view to encourage the purchase/sale of financial instruments.