Solana Was Trending in 2021; Why Is It Falling Now?

The first thought of cryptocurrencies back in 2021 was more hype than real-time solutions. Technology ahead of the present time has always received flak for its shortcomings, but SOL was amongst the fastest growing cryptocurrency with a real use case. From under $3 on January 2021, it moved past $250 by November 2021. This price momentum was unexpected that resulted in investors comparing it to be the next Ethereum level blockchain soon to become a market leader. But as we have understood from years of new coins being launched with ICOs and whatnot, hype often acts as a trend reversal in the near term. 

Although SOL is way faster than ETH with fractional gas fees, it temporarily marked total capitalization above USD 100 billion. This baffling number was soon met by profit booking witnessed across the cryptocurrencies, but since SOL was the fastest-growing, its fall affected people the most. As of March 03, 2022, SOL is worth above USD 32 billion in market capitalization and above USD 51 billion in diluted market supply, and it ranks 8th in terms of market capitalization. 

SOL Price Analysis

The price trend of Solana over a longer time frame shows some buying support at $150 – $175 levels, followed by $75 – $100 at present. Currently, $75 – $100 has presented itself as a support level bringing a balance between buyers and sellers. This equation has halted the price movement in either direction creating a good opportunity to acquire some SOL tokens. 

At the same time, many are booking their profits as a precaution. Based on the Solana price prediction, the coin would take off from these levels once positive news starts coming out about cryptocurrency acceptance, taxation, and legislation. The buying sentiment in August – September 2021 remains unchallenged as currently, the strength index has toppled to near median levels of 45.

By offering a way to develop decentralized blockchain-based applications without having to worry about transaction or gas fees, SOL attempts to dominate this market segment. SOL primarily focuses on its primary global network to offer scalability and integration solutions. Wider acceptance of this ecosystem could lead to an increase in its valuation. At present, SOL has decent buying support near $100 levels, with RSI indicating a rise-up showing a potential to keep moving in the upwards direction.

The price action is much clearer with a longer duration, but one-day charts also show the number of times resistance or support was breached. In this term, we can see the RSI taking a rise from near oversold zones indicating fresh buying at lower levels. On the other hand, limited upside movement on charts showcases a limitation to the buying trend. The volumes on SOL have to substantially increase to overcome its immediate resistance of $120, ready to gobble up any upside movement. With the breach of $120 levels, SOL can be expected to trade under $200 for some time before giving a decisive breakout or stumbling to profit booking.