With strong fundamentals and a key price pivot, Solana (SOL) aims for a significant 40% surge in its value.
Solana is currently poised at a critical juncture that could dictate its trajectory over the coming weeks. If SOL bulls successfully push past the primary resistance, a price surge of up to 40% may be in the offing. Conversely, if they falter, SOL could drop around 21%.
A Pivotal Point for SOL
Analysis of the 1-day chart using Fibonacci retracements suggests that SOL is currently at a crucial crossroads. As of this writing, SOL was trading at $19.19, just shy of the 38.2% Fibonacci retracement level at $19.72, a barrier that has so far proven unassailable.
A victory at this level could open the path back to the $21 price point, where Solana was trading before the U.S. Securities and Exchange Commission’s (SEC) classification of the SOL token. Above that, the 200-day Exponential Moving Average (EMA), often viewed as a ‘bull line,’ lies in wait at $22.05. SOL investors have been unable to cross this line since April 2022.
If this bullish scenario unfolds, the 200-day EMA will pose the next major hurdle for SOL. Overcoming it could increase SOL’s price to the 61.8% Fibonacci retracement level at $27.00, corresponding to a potential 40% rally. This level represents the year-to-date high and is likely where a temporary halt in the rally may occur.
In the event of a bearish outcome, should Solana fail to capture the 38.2% Fibonacci retracement level, a slide towards $15.30, representing a 21% loss, is conceivable.
SOL Supported by Sound Fundamentals
Solid fundamentals back the recent momentum in Solana’s price. According to the data by Crypto Crib, a prominent crypto media shared on July 1, Solana outpaced Ethereum in terms of 24-hour NFT trading volume for the first time. Solana NFTs witnessed a trading volume spike to $25.5 million, an astounding 1,900% day-over-day increase, compared to Ethereum’s 28% increase, equating to $24.6 million.
Drift Protocol’s “Super Stake” has been causing a buzz within the Solana ecosystem. It allows cautious traders to earn an extra 10% return by leveraging Solana Staking derivatives. The favored derivative is Marinade-SOL (mSOL) from Marinade Finance, which lets traders deposit mSOL tokens as collateral and borrow more SOL tokens for ongoing restaking, effectively tripling returns.
This strategy bears a resemblance to Ethereum’s MakerDAO and its stETH Yield Multiple Staking via Aave. While it carries inherent risks, the demand for Super Stake remains high, propelling Solana’s utilization to its limit.