The Solana (SOL) price is currently at a crucial turning point, which will be of decisive importance for the coming weeks. If the SOL bulls manage to leap above the currently most important resistance, a rally of up to 40% could be on the cards. If the bulls lose the upper hand, another plunge of up to 21% could be imminent.
Crucial Moment For The SOL Price
An analysis of the 1-day chart using Fibonacci retracements shows that the SOL price is at a pivotal point for the coming weeks. At the time of writing, SOL was trading at $19.19, just below the 38.2% Fibonacci retracement level. So far, SOL bulls have failed to break above this level at $19.72.
If successful, the price level above $21, at which SOL was trading before the U.S. Securities and Exchange Commission (SEC) classification of the Solana token was announced, would again be within reach. A bit further up, the 200-day Exponential Moving Average (EMA) awaits the SOL price at $22.05 – an indicator often described as a “bull line” that SOL investors have been unable to break above since April 2022.
In this bullish scenario, the 200-day EMA can be considered as the second most important challenge for SOL bulls. An upside break could allow the price to rise to the 61.8% Fibonacci retracement level at $27.00, which also marked the year-to-date high, potentially marking a 40% rally. At this level at the latest, a preliminary pause in the rally is to be expected.
In a bearish case, SOL fails to capture the 38.2% Fibonacci retracement level. In this case, a drop towards $15.30 is conceivable, which would represent a price loss of around 21%.
Solana Displays Strong Fundamentals
The renewed momentum in Solana’s price can also be attributed to strong fundamentals. Last Friday, June 30, Solana surpassed Ethereum in 24-hour NFT volume for the first time ever. Solana NFTs saw a surge in trading volume to $25.5 million, up over 1,900% day-over-day (compared to +28%, or $24.6 million for Ethereum).
Moreover, Drift Protocol’s “Super Stake” is also currently causing a stir in the Solana ecosystem. Risk-averse traders can earn an additional 10% return by leveraging Solana Staking derivatives. Marinade-SOL (mSOL) from Marinade Finance is the preferred derivative, enabling traders to deposit mSOL tokens as collateral and borrow additional SOL tokens for continuous restaking, multiplying returns up to three times.
This concept draws parallels with Ethereum’s MakerDAO and its stETH Yield Multiple Staking via Aave. While there are inherent risks, demand for Super Stake remains high, pushing Solana’s maximum utilization.
Super Stake serves as a catalyst for the battered DeFi ecosystem, driven by the booming NFT market. Solana’s resilience, coupled with innovative solutions like Super Stake, positions SOL for a bullish breakout.
Featured image from iStock, chart from TradingView.com