Solana (SOL) Skyrockets to a 25-Month High; Is a Correction Looming?

• Solana soars to $173.27, marking a 14% rise in 24 hours, hitting a 25-month high.
• SOL sees a 51% increase in 30 days, with predictions pointing towards $250.
• RSI hits 80.50, signaling potential overbuying amid its bullish surge.

Solana (SOL) price has surged by 14% in the last 24 hours, reaching $173.27 as bullish momentum continues to build in the cryptocurrency market. This impressive gain is part of a broader uptrend for SOL, which has seen its value increase significantly over the past month. 

The cryptocurrency industry, buoyed by Bitcoin’s new all-time high, has been experiencing a substantial uptrend in valuation, with SOL showcasing robust bullish sentiment.

SOL/USD 24-hour price chart (source: CoinStats)

Bullish Sentiments in Solana’s Rally

The recent price surge places Solana at the forefront of a bullish wave sweeping across the crypto sector. Over the past seven days, the SOL token has registered approximately a 23% increase, while its 30-day performance shows an even more remarkable 51% uptick. 

This sustained buying pressure is a clear indicator of the growing investor confidence in Solana’s potential. Concurrently, this bullish momentum has been buoyed by the announcement of an Israeli Shekel-backed stablecoin, BILS, which will launch using token extensions on Solana.

This uptrend has resulted in Solana recording a new 25-month high, signaling strong bullish sentiment within the market. Analysts and traders have expressed bullish predictions for SOL, with some forecasting a potential rally toward the $250 mark. This sentiment is based on the transformation of the March 2022 resistance level of around $140 into a strong support zone.

Furthermore, the SOL/ETH chart analysis indicates a promising scenario for Solana against Ethereum, with the potential for substantial outperformance. Christopher Inks, founder of TexasWest Capital, and macro expert Raoul Pal have both identified technical patterns suggesting a breakout and bullish momentum for SOL in comparison to ETH. These analyses contribute to the growing optimism surrounding Solana’s market position and potential for further appreciation.

SOL/USD Technical Analysis

On the SOLUSD 4-hour price chart, the Keltner Channel bands are rising, with the upper, middle, and lower bands at $167.90, $156.57, and $145.22, respectively. This suggests a strong upward trend in price movement, with probable resistance at the upper band and support in the middle band. 

SOL/USD 4-hour price chart (source: TradingView) 

However, following a sequence of green candlesticks, the price action has breached the upper band, indicating that the bullish trend may continue. However, because it is above the upper band, there is a chance of a retreat or consolidation before a further upward trend. This shift may provide a purchasing opportunity for traders trying to enter the market at a cheaper price point.

Furthermore, the Relative Strength Index (RSI) reading of 80.50 indicates that SOLUSD may be overbought in the immediate term, implying a market reversal or correction. As a result, traders should exercise caution and implement tight stop-loss orders to safeguard profits in the event of a reversal.