• May 27, 2022

Solana: These are the key prices to consider today

Solana: These are the key prices to consider today

Solana is a highly functional open source project that relies on the permissionless nature of blockchain technology to provide decentralized finance (DeFi) solutions. While the idea and the initial work of the project started in 2017, Solana was officially launched in March 2020 by the Solana Foundation based in Geneva, Switzerland.

Solana is known in the cryptocurrency space due to the incredibly short processing times that the blockchain offers. Solana’s hybrid protocol allows significantly reducing validation times for both the execution of transactions and smart contracts. With ultra-fast processing times, Solana has also attracted a lot of institutional interest.

The Solana protocol is intended to serve both small-time users and enterprise customers alike. One of the main promises of Solana to customers is that they will not be surprised by the increase in tariffs and taxes. The protocol is designed in such a way that it has low transaction costs and at the same time guarantees scalability and fast processing.

Key facts:

  • SOL touched $259.9 at the beginning of November, but fell again tendentially.
  • The cryptocurrency has been down for 6 months after the failure in its hardware that generated a stoppage in the entire network.

SOL has long been part of the TOP 10 of marketcap in the crypto world, its strong advertising has generated a wave of enthusiasts for this new technology.

During the last 6 months, SOL lost approximately 60% of its value while it saw the other global markets collapse due to the fear of aggressive policies by Jerome Powell, Fed Chairman.

After the new “all time high”, SOL ended up with the accumulation zones of the enthusiasts who entered through FOMO; coming to be in a dangerous zone, between the great blackout of its operating system, SOL suffered enormously, the community still could not forgive her.

It seems to be in an accumulation at the moment, re-entering the previously tested zone, where in movements of high volatility, it could define whether to continue upwards or change its course downwards.

With the RSI it is in a bearish area of 44.52%, very unfavorable for the price, but the trend structure that it will resonate at those levels until it falls into a regression. And so then continue upward.

In the crypto market everything depends on BTC (Bitcoin), a rise in BTC would confirm our forecast about SOL for the coming weeks. BTC is located at the lower limit of the ascending channel started on January 21. The ascending triangle was retaken, we would wait to see if it stays in the zone and bounces.

While BTC is a risky asset, greater stability on the part of the Fed in the May decisions and peaceful negotiations in Ukraine, would propitiate the necessary conditions for the confirmation of this proposed scenario.

Bearish possibility on the horizon

It should not be ruled out, after all, these are projections based on the information we have so far, faced with new information, this bullish projection could be modified. Always putting good risk management before us, the worst scenario in this market is that the opposite of what has already been said happens.

It will be then, in the first week of May, before a new FED meeting, that they could:

  • Aggressive conditions for the markets have been established, invalidating our previous analysis.
  • El Salvador’s BTC bonds could be canceled due to pressure from the IMF.
  • Or the war in Ukraine could escalate.
  • Russia may not end up trading its commodities in Bitcoin, thus avoiding driving unprecedented crypto adoption.

Whatever the scenario, we could be invalidated, after all, the market is always right and we just want to hit whatever you think.

Given this scenario, the estimated target for SOL would be at the level of $50.

The market, right now, is waiting not only for the events related to the war and the crypto adoption in Russia. As we mentioned earlier, the eye is on the imminent launch of Bitcoin-based bonds in El Salvador, in addition to having reacted slightly positively after the favorable ruling on Bitcoin mining in the European parliament and very positively to a much less aggressive decision by the FED.

At the moment, already SOL, is wanting to recover, it just needs some relief to be able to grow together with the rest of the altcoin market.

This content has been generated by Matías Colloso, Professor at the CBA Crypto Trading academy and Member of the Córdoba Bitcoin community. You can follow him on his LinkedIn.