Cryptocurrencies were displaying bullish pressure last month, after they stopped making new lows in January, which was a good sign to start with. But last week we saw a reversal lower, suggesting that buyers are still not confident enough. Although, Solana crypto has stopped declining in the last several days with the 100 SMA (green) turning into support on the daily chart.
Solana was declining after reaching the all-time high at $260 on November 6. The downward movement led to a low price of $75.35 in February, where a support zone formed around that area. During the bullish momentum in the second half of last year, Solana was forming support after support as the price was moving higher, then these support levels were broken one after another, with the 50 SMA (yellow) acting as resistance on the daily chart.
Solana Daily Chart – The 100 SMA Holding As Support for SOL
The retreat seems complete after the rejection at the 200 SMA
Solana is a Layer 1 blockchain network, employing the proof-of-history (PoH) algorithm to verify transactions. It was showing increasing weakness since last November, when the second phase of the global crypto crackdown started. Solana is a blockchain with very scalability. It can process up to 700K transactions per second (TPS), with a 1 gigabit per second network connection.
It specializes in application building and as the Head of Product Engineering, Bartosz Lipinski said at the recent Solana Hacker House World Tour event in Dubai, “Solana is an open network upon which anyone can build applications”. Solana was a very popular blockchain in 2021, with over 500 applications being built on it, which kept the demand on for SOL token.
Last month, Solana also announced the launch of the decentralized Pear-to-Pear (P2P) payments protocol, Solana Pay, which is an open protocol for developers to build on and customize, with standardized payment criteria. or in simpler words, Solana Pay is a decentralized payments protocol, which will allow online merchants to accept and move any volume of assets compatible with the Solana network, for a fraction of a cent and provide competition for other fintech platforms such PayPal.
So,
SOL/USD has been retreating so far this month, but the decline has stalled in the last several days at the 100 daily SMA, which suggests that the pullback might be over and the net move will be higher. The stochastic indicator is oversold now, which supports the idea that the retrace is complete.
SOL/USD
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