Solana’s (SOL) Rally Depends on $211 Support Remaining Intact

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In the past week, Solana’s (SOL) price has surged by 9%, pushing its market capitalization back over the $100 billion threshold, now at approximately $103 billion. However, it’s worth noting that in the last day, SOL’s trading volume has dropped by 34%, with transactions currently amounting to $2.4 billion.

A favorable situation for SOL is suggested by its strong factors like the CMF and a recent ‘golden cross’, which boosts its bullish trend. Yet, whether this uptrend continues or encounters a reversal hinges on SOL’s capacity to withstand the vital $211 support line.

Solana CMF Still High, Yet Shows Drop from Its Peak Levels

Right now, the Chaikin Money Flow (CMF) for Solana stands at 0.23, showing that more money is flowing into this asset compared to outflows, indicating a positive trend. The CMF calculates the movement of funds into and out of an asset over a specific time frame, taking both price and volume into account. A value greater than zero indicates increased buying activity, while a figure below zero signifies higher selling pressure.

In my study, I’ve observed an impressive rise in the value of SOL CMF, which was almost non-existent at the beginning of January, but skyrocketed to 0.33 by yesterday. This substantial increase suggests a robust wave of purchasing enthusiasm throughout this timeframe.

0.23 SOL CMF continues to show positive signs, suggesting ongoing buyer enthusiasm, although it’s less fervent than its recent high points. The dip from 0.33 could be an indication that the buying pressure has eased slightly, possibly pointing towards a phase of consolidation or a slower rate of price increase.

To keep its upward momentum, the Cumulative Money Flow (CMF) should either hold steady or increase further, showing restored investor confidence. Persistent decreases, on the other hand, might indicate waning demand and potentially lead to a near-term price adjustment.

SOL Sellers Show Signs of Recovery

The Average Directional Index (ADX) for Solana (SOL) has significantly increased to 45, jumping up from 10.8 in the last four days. This rapid rise indicates a robust formation of a trend. The ADX scale ranges from 0 to 100, with values exceeding 25 indicating a strong trend, while numbers below 20 imply weak or non-existent momentum.

The significant surge in ADX indicates that Solana (SOL) is presently riding a robust upward trend, signifying high market activity and investor trust in its price trajectory.

The directional signals offer additional understanding about the present market trend. Currently, the +DI (representing buying strength) stands at 27.5, although it decreased slightly from 35.8 yesterday, suggesting a minor let-up in bullish power. On the other hand, the -DI (indicating selling activity) has grown to 12.6 from 8.6 yesterday, hinting at a slight uptick in bearish actions.

Regardless of these changes, the overall upward trend continues, with the Positive Directional Index (DI) still notably higher than the Negative DI, reinforced by a robust Active Directional Index (ADX). Yet, the declining Positive DI hints that Solana’s bullish power could be leveling off. This might indicate an approaching consolidation period unless renewed buying strength emerges.

SOL Price Prediction: Can It Return to $246 Soon?

As a researcher, I am closely observing the behavior of Solana’s price movement. The crucial factor determining its trajectory is whether it can hold the significant support at around $211. If this support fails, there’s a potential for SOL to shift into a downward trend, with $203 emerging as the next vital level to monitor closely.

If the value fails to stay above $203, it might speed up the drop, possibly causing the price to fall again towards $185. This indicates a strong pessimistic change in market opinions.

Instead, let me rephrase that for you: On the flip side, the Exponential Moving Average (EMA) continues to indicate positivity, suggesting hope for an uptrend ahead. Moreover, a ‘golden cross’ appeared only yesterday, implying the likelihood of continued strength in the market momentum.

Should the $211 barrier persist, the SOL price may strive to surpass the resistance at $221. Overcoming this threshold might potentially open doors for additional growth towards $229. If the bullish trend continues robustly, Solana’s price could aim for $246, which represents a 16% increase from its current position.

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2025-01-05 19:56