Solana May be Gearing for a Surge to $220. Here is Why

Solana saw notable declines over the last four days, causing prices to slip to some of their lowest values in almost two weeks.

Noteworthy is price action on Thursday, which the charts suggest is the biggest decline since Oct 17. The altcoin kicked off the session at $192 and peaked at $198 but lost momentum, retracing to a low of $178. However, it rebounded and closed at $184.

The asset prints a green candle at the time of writing, suggesting that recovery is underway. It added $2 to its value on Saturday and is holding prices above $186. If the bulls continue the uptrend, the altcoin may regain all the levels it lost this week.

Fundamentals are positive for the asset, which may lead to further bullish sentiment among its investors. One of the biggest news stories in the last seven days was Western Union’s plans to launch its stablecoin on Solana. The American multinational financial services firm’s U.S. Dollar Payment Token (USDPT) will go live during the first half of next year.

Another big event this week was the launch of the Solana  ETF. Bitwise’s proposed ETF went live on Tuesday and received significant support. Gareth Jenkinson reported that the investment fund garnered $56 million in trading volume following its debut. 

Sosovalue reported that following the launch on Tuesday, the total net asset was $288 million and the net inflow was $69.5 million. The inflow continued into Thursday, but at a small rate. 

However, both events have yet to have a significant impact on prices, as SOL has been in a downtrend since the start of the week. This could mean that they may contribute to future price action, especially the ETFs.

Solana Flashes Green Signals 

Solana rebounded at $178 on Thursday. While many may conclude that this is the bottom, previous price movements suggest a possible decline to $173. 

A look at the bollinger bands shows an increased likelihood of this happening. In several instances during the decline, such as those on Thursday, the asset almost always tests the lower band on the 1-day chart.

Nonetheless, another action is playing out on the chart. The gap between the bands is narrowing. Typically, a sign of reduced volatility, it also hints at an impending breakout. Price may experience low volatility, remaining rangebound for an extended period.

The moving average convergence divergence suggests that the asset may see further decline in the coming days. The space between the 12 and 26 EMA is narrowing as the shorter exponential moving average is declining. A bearish may follow, sealing a further downtrend.

On the other hand, the latest rebound may be the bottom, as speculated. If that happens, Solana may be gearing up for further increases. The fibonacci retracement level shows that the coin reclaimed the 61% mark, and previous price movement showed how several downtrends ended, and it became a launchpad for an attempt at the 50% mark.

A retest of the $200 resistance is almost always guaranteed after breaking above $185. Nonetheless, further increases may follow, causing a surge above the 38% fib mark at $213.

The assertion aligns with a possible surge to bollinger’s upper band. Breaking out of the metric may result in retesting $220.

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