Solana Price Nears $120 As Supply Distribution Hits Monthly High

Solana (SOL) has experienced significant volatility recently, with a marked decline following its failure to breach the $150 mark. 

Over the last few days, Solana has struggled to break through certain resistance levels that have been affected by broader market trends. However, investor optimism appears to be driving recent price movements as SOL nears $120.

Solana Gains Support

One of the indicators showing promise for Solana’s recovery is its velocity, which measures the pace at which tokens are being circulated. The velocity has reached a monthly high, signaling that the transaction of supply is accelerating.

Amidst recovering price, there’s a noticeable increase in the velocity at which tokens are being transacted, highlighting greater demand. Velocity and price tend to move in tandem. Typically, when both price and velocity rise together, it’s considered a bullish signal — a trend currently seen with Solana.

Solana Velocity. Source: Glassnode

However, despite the favorable signs from the velocity, Solana’s macro momentum remains relatively weak. The Relative Strength Index (RSI) is still stuck in the bearish zone, under the neutral 50.0 mark.

While the broader market has seen some rallies, Solana’s RSI indicates a lack of significant buying momentum. This suggests that while some positive movement is occurring, broader macroeconomic factors may still be playing a limiting role.

The persistent bearish sentiment reflected in the RSI implies that Solana’s recovery may face continued challenges. Despite occasional price bounces, the altcoin has not yet experienced enough momentum to break free from the bearish pressure.

Solana RSI. Source: TradingView

SOL Price Attempts Recovery

Solana’s price has risen by 8.2% in the past 24 hours, trading at $114. While it is showing signs of recovery, the altcoin remains under the key psychological price of $120. Beyond it lies a crucial resistance of $123, which has proven challenging in recent days.

If the bullish momentum continues, Solana could rise past $120 and aim for $123. Securing it as support would likely lead to further gains, pushing Solana toward the $135 mark. Investor confidence and continued supply distribution could support this upward movement.

Solana Price Analysis. Source: TradingView

However, if Solana fails to breach the $123 resistance, the price may retreat toward $105 or even lower. A drop below $105 could signal a deeper decline, with the altcoin potentially heading toward the $100 mark. This would invalidate the recent bullish outlook, extending the correction phase for Solana.