Solana’s recent price movement has been rather limited despite huge accumulation by traders. While the coin has been stable as Solana (SOL) rides the heating up altcoin rally, upward momentum for the coin seems suppressed at the moment.
Notably, technical indicators point that the coin is entering a price consolidation phase before trend confirmation. However, Solana enthusiasts still remain optimistic as they keep watch for a potential breakout.
Investors Continue to Accumulate SOL
Solana has seen increasing accumulation from traders in the last few days. Glassnode data indicates that Solana traders have moved 2.2 million SOL (about $381 million) out of exchanges over the last ten days. This has resulted in a shrink in the balance of Solana on exchanges, hence highlighting strong accumulation.
The accumulation is as a result of a number of important factors. Investor optimism is rising among Solana traders potentially due to the wider bullish sentiment in the cryptocurrency market. While Bitcoin and altcoins, including SOL have retraced following recent bullish rally, hopes for continued rally are still high.
Additionally, Solana investors are accumulating as a result of Fear of Missing Out (FOMO). Most of these investors believe that SOL could breakout soon hence the accumulation. Because of this, the number of Solana addresses has been rising recently. As per the data by Glassnode, the total number of Solana addresses have surged to 2.35 billion.
With investors removing SOL from exchanges, this means a reduction in the amount of tokens available for selling. Because of fewer tokens to be sold, a rise in demand could quickly cause a limitation of supply, making the market even more supportive of a price increase.
Technical Indicators Point to Potential SOL Price Consolidation
On a technical basis, Solana is currently eyeing a turbulent market ahead. The overall market is showing signs of incoming price volatility. Analysis of technical indicators like the Bollinger Bands shows that the bands are narrowing. This pattern formation is often interpreted to mean volatility is on the horizon.
However, the narrowing of the Bollinger Bands also means that the market could be entering a consolidation phase. This puts Solana in a make-or-break moment as the market could either breakout or dip from the current level.
Solana is more likely to consolidate around the mid-band situated at $170.18, just below the current price. The upper band is located at $188.16 while the lower band is located at $152.20.
Key Price Levels to Watch in Solana’s Price
As per the daily chart on Trading, Solana is trading at $171.89 as at press time. This level sits just above the mid-band situated at $170.18, hence confirming SOL could be set to consolidate.
To confirm a breakout, Solana must surge past the key resistance level. SOL is currently facing immediate resistance around $178 level. Clearing this level could open doors for a rally towards the next resistance at $188. Such momentum would confirm an uptrend with a potential for even higher prices.
However, if Solana fails to clear the immediate resistance, the price could continue to dip. SOL has immediate support at $167. A breach of this level could result in a deeper dive towards the next support at $154 level. This would confirm bearish momentum for Solana.
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