From Highs to Lows: Solana's Price Journey – Can You Recover from FOMO Blunders?
Initially praised for its exceptional performance, SOL's share price has soared by a staggering 500% since October 2023, contributing a staggering 105% gain in December alone. Much of this surge has been attributed to fear (FOMO) of Solana's SPL TokenAirdrop, with Token such as Jito (JTO), BONK, and Dogwifhat (WIF) playing a major role.
However, since the beginning of the new year, the tide has shifted. In recent weeks, the value of SOL has corrected, shaking investor confidence. Over-optimism about Airdrop expectations and delayed launches led to this correction, as the push for Decentralization Applications (dapps) proved short-lived.
The drop in the value of SOL has been noticeable, and the Token has rarely broken through the $107 mark recently. On January 19, SOL fell 9% to a low of $95. Analysts observed a sustained pullback in the $100 level, further adding to investors' cautiousness. The data shows that the current SOL is trading at $85.88, down 3.65% in the last 24 hours.
While SOL's Token price is trending downward, there are also positive signs of growth elsewhere. Solana's SOL Token total value locked (TVL) reached an all-time high of 15.4 million on December 19, 2023, a significant 60% increase compared to the previous month.
In addition, there has been an increase in Solana's network activity, particularly in terms of transaction volume and volume. Despite a slight decline in transactions and active dapp users over the past week, Solana's dapp transaction volume reached an impressive $594 million, with a staggering 72.3 million transactions.
Technical analysis paints a mixed picture for the future of SOL. While the Token remains above the 50-day and 200-day exponential MAs, indicating bullish sentiment, recent price action has raised concerns about a potential reversal. On the other hand, SOL's Relative Strength Index (RSI) of 43.70 indicates a bearish market, while the MAL Convergence and Divergence (MACD) of 55.50 indicates an rise in the market.
Initially, analysts were optimistic, expecting SOL to remain bullish in 2024, with price forecasts ranging from $250 to $300. However, the overall price decline observed since the beginning of the year, coupled with increased selling pressure, has shifted control to the bears.
The struggle between bulls and bears has left investors in a difficult position. Due to resistance levels and a cautious market mentality, many people are just waiting to see what happens. It is worth mentioning that expert Toni Ghinea predicts a possible fall to $60 by the end of 2024, which may exacerbate negative sentiment in the SOL market.
(Source: Christian Encila)
