The price of Solana is facing an extremely important trend decision in the 1-day chart. Will the uptrend continue or will it be invalidated? The latter could threaten a drop to the psychologically important $20 level.
A look at the 1-day chart shows that SOL failed in several attempts at the 200-day Exponential Moving Average (EMA) (blue) in mid-April. The indicator has an extremely high significance for the long-term trend.
While Bitcoin and numerous altcoins are already trading above the 200-day EMA, SOL is still stuck below the trend indicator as a consequence of the FTX crash. After falling below the 50-day EMA (orange) on Friday, the SOL price has fought its way back above the level today.
Still, the price is at a key support, an ascending trendline (black) that has proven directional since the December 28, 2022 low at $7.98. A retracement could wipe out the uptrend and trigger another drop to $20. On the other hand, a break above the 200-day EMA currently at $25.13 could turn the chart picture in favor of the bulls.
SOL Bull Case Prevails
Solana rose to $25.96 in mid-April, but could not sustain the breakout above the 200-day EMA. In order to start a new attempt towards the north, Solana must break above $22.78 on a daily closing basis. If a stabilization above this resistance level succeeds, the buy side could again target the 200-day EMA.
Only when this major trend line is broken dynamically, the yearly high at $27.13 comes into focus, where the 38.2% Fibonacci level is also located. If the Bitcoin price also rises to a new high for the year at this point, the SOL price could shoot straight up to the $30.44 resistance level.
However, Solana is likely to make a stop here. The next target area after a consolidation would then be the 50% Fibonacci level at around $33.
In a bearish scenario, Solana falls below the black uptrend line and then also breaks the 23.6% Fibonacci retracement at $19.39 on the daily close. In this case, Solana is likely to trend towards the March 10 low near $16.
Bullish News From Solana Ecosystem
Fundamentals also point to a bull case for Solana. Just recently, the Helium (HNT) Network migrated to Solana. In early April, the Render Token (RNDR) community voted to migrate to the high-speed blockchain.
Today, Solana Labs announced an open-source reference implementation for a ChatGPT plugin that will allow users to interact with the SOL network directly from ChatGPT. Once available, ChatGPT plugins will allow users to check their wallet balance, transfer tokens, and purchase NFTs.
Solana also continues to mingle at the top of the NFT space. As one community member points out, four of the top 10 NFT collections are based on the Solana blockchain.
Probably a dead chain
4 solana projects in the top 10 pic.twitter.com/3158xT6XDx
— Paulo (@TycoonPal) April 24, 2023
Featured image from PHD Media, chart from TradingView.com
