Solana analysis: Small rally for SOL in the offing?

Solana Saga

In a cryptocurrency market characterized by its up-and-down dynamics, Solana (SOL) is emerging as an interesting and promising case. While Bitcoin (BTC) and most altcoins are trading in a tight range due to low volatility, SOL has shown exceptional performance. Data from CoinMarketCap reveals that in the last week, SOL has experienced a growth of 7.22%, reaching a value of $24.94. Could this be a sign that the cryptocurrency is preparing for a major long-term rally?

Encouraging signs on technical charts

In the technical analysis of the SOL/USD pair on a 4-hour time frame, the Awesome Indicator (Awesome Oscillator, AO) has entered the positive region, marking a value of 0.33. A positive AO reading suggests that the 5-period Moving Average (MA) is higher than the 34-period MA.

This indicator reveals that bullish forces are influencing SOL’s dynamics, generating bullish momentum. Also, the Exponential Moving Average (EMA) Analysis shows that the 50 EMA (depicted in blue) is above the 200 EMA (depicted in yellow). This situation often suggests that SOL could sustain its long-term bullish rally.

However, it is relevant to note that there has not been a “golden cross” on the 4 hour chart, a cross where the short-term EMA crosses above the longer-term EMA. Confirmation of this cross could lead SOL to rise as much as 25% above $24.78.

SOL/USD 4-hour chart. Source: TradingView

External factors that could boost the rally

Despite the encouraging technical signs, it is important to remember that the SOL rally could also depend on external factors. Increased activity on Solana’s network and increased market share could play a crucial role in its price evolution.

Possible new surge of momentum

The Directional Movement Index (DMI) on the 4-hour chart shows that SOL is in solid direction. At the time of writing, the +DMI (represented in green) exceeds the -DMI (represented in red), with values ​​​​of 26.77 and 12.61 respectively.

The dominance of the +DMI indicates that buyers are still in control of the market. In addition, the Average Direction Index (ADX) stands at 36.57. ADX values ​​above 25 suggest that the price of an asset is in a strong direction.

SOL/USD 4-hour chart. Source: TradingView

Ultimately, the accumulation of these technical signs could indicate that the SOL is experiencing a solid move higher. As volatility increases and demand increases, there is a chance that SOL will reach the $30 region in the near future. However, it is always advisable to consider multiple factors before making investment decisions in the cryptocurrency market.