Solana value moved above the $100 milestone on Jan. 30; rising defi volumes and constructive sentiment surrounding the upcoming Jupiter airdrop might propel it additional.
On Jan. 30, Solana’s value briefly broke the $100 barrier for the primary time in 2024. Nevertheless, barely 48 hours later, on Feb. 1, crypto costs dipped after Fed Chief Jerome Powell made a press release hinting at suspending price cuts past March 2024 as extensively predicted.
Solana value fell 12.5% on Fed Chief Jerome Powell’s statements
Within the aftermath of the Federal Open Market Committee (FOMC) assembly, Powell’s assertion triggered a major pullback throughout crypto markets. TradingView’s TOTAL3 chart represents the cumulative worth of all listed crypto belongings, excluding Bitcoin (BTC) and Ethereum (ETH).
The chart beneath reveals that the altcoin markets shrunk by 5.3% between Jan. 30 and Feb. 1. In the meantime, Solana (SOL) value dipped 12.5% from its Jan. 30 peak of $106 to a neighborhood low of $93.7 on Feb. 1.
This illustrates that bearish headwinds from Powell’s assertion have impacted Solana’s value disproportionately, with its 12.5% dip exceeding the general altcoin market common by greater than 7%.
And not using a distinctive bearish catalyst, an asset’s value sinking sooner than the sector common generally is a key sign that it might be undervalued or oversold. This outsized volatility might set the stage for SOL value to enter a significant rebound when the trade sentiment flips bullish.
Solana defi market share crossed 26% in January
Solana defi buying and selling quantity tendencies for January 2024 sign that the 12.3% SOL value downtrend this week is probably going not pushed by a commensurate deterioration in its basic community utility.
DefiLlama’s DEXs buying and selling quantity metric tracks and compares the nominal worth of transactions involving crypto belongings throughout varied decentralized exchanges. This displays the liquidity and investor exercise inside a decentralized monetary ecosystem by blockchain.
As seen within the chart beneath, Solana’s dominance inside the defi sector elevated from 16.5% to 26.9% between Dec. 31 to Jan. 31.
A more in-depth take a look at the chart reveals that Solana has witnessed a 15.2% improve in buying and selling volumes up to now weekly timeframe; it leapfrogged Arbitrum (ARB) and ETH to assert first place.
Elevated buying and selling quantity on a blockchain community is a tell-tale signal that native tokens are in excessive demand. If this uptrend in Solana community participation and defi exercise persists, it’s solely time earlier than SOL value enters a rebound part.
Constructive speculations surrounding the Jupiter (JUP) token airdrop might additional exacerbate the Solana defi exercise within the days forward, probably including one other catalyst for a possible SOL value breakout towards $120.
SOL value forecast: Bulls might goal $120
From an on-chain perspective, SOL value seems to be oversold relative to the market common. The rising defi volumes and the upcoming Jupiter airdrop are key catalysts that might propel SOL’s value up the February chart.
Provided that Solana’s value lately broke above $105, the bulls might set their sights increased and try a retest of the $120 space throughout the subsequent rally.
The Bollinger band’s technical indicator additionally affirms this stance. When an asset’s value breaks above vital averages, it indicators a rising bullish momentum. And with SOL presently buying and selling at $96 at press time on Feb 1, it has moved above the 20-day easy shifting common value of $93.
This alignment means that Solana’s value is recovering, shaking off the bearish impacts of Powell’s price lower postponement feedback.
Nevertheless, the higher Bollinger band reveals that the bears might mount a major resistance on the $103 space. A decisive breakout above that resistance sell-wall might open the doorways to a possible $120 retest.
On the flip aspect, the bears can power a reversal beneath $80, they may summarily invalidate this optimistic prediction. However as depicted above, the bulls will doubtless regroup on the decrease Bollinger band to defend the $83 help.