Solana (SOL) Undergoes Massive Profit Booking From New Highs!
Blockchain is not just a term but a domain of endless possibilities. There is a massive scope on this blockchain network. With the exponential growth of Decentralized finance, Solana has made its mark on the industry. Not only does Solana support DeFi, but it also facilitates Decentralized applications. As a result, it will have improved scalability.
Solana uses a unique validation technique termed a hybrid model using both Proof of Stake and Proof of History protocols. These protocols enable Solana to decrease the validation time for completing regular and smart contract transactions. With its ultra-fast processing speed, it has gained massive interest from different institutions. To guarantee non-stop scalability, Solana attempts to maintain lower transaction costs with its lightning-fast validation speed.
From the 42nd rank in February 2021, Solana has made its way into the top ten in just five months. Solana is currently ranked at 8th position with a market capitalization of USD 33 billion.
Solana Price Analysis
Solana is beyond comprehension in terms of price action, and it is expected to trade even higher. However, despite the price, the actual market capitalization is relatively tiny compared to Solana’s growth prospects with leading blockchain networks. Furthermore, Solana is strictly moving on a sentimental value basis, as it is considered a potentially strong competitor to Ethereum’s scalability.
Solana should be considered as the most trending cryptocurrency as per its price action. The rise to new highs has made the earlier high in April 2021 look like a retracement, where it capped out at $56. From $1.54 on January 01, 2021, to $130 on August 31, Solana has gone up by 8500% in just eight months. Not only is it an excellent achievement for Solana, but it also highlights Solana’s scalability.
SOL/USD is up by almost 265% in just one month, and this rise has been alleviated to new highs in the last week, where it gave a decisive breakout at $80. Back then, it was clear that Solana will be hitting a new all-time high much higher than expected. But the worrying fact is the profit booking on the day it hit 19%, and subsequently, it closed in the red. The higher wick at the new highs indicates a small scope of cascading profit booking. We will have to consider the price action on hourly charts to clarify the possible movements.
Both MACD and RSI were in extreme bullish sentiment despite the profit booking witnessed yesterday. RSI is showing a level of 83 on histograms. At the same time, MACD rejected the bearish crossover and moved up with a constant difference between the two moving averages, indicating a positive sentiment on both shorter and larger time frames.
Solana has strong support at $90 – $95 levels, which could help it bounce back in case of persistent profit booking. However, one should book some profits and, as per our Solana prediction, wait the next few days for better clarity on the possible outcomes.
Solana had a consolidation period over the last couple of days, even on the hourly charts, which can be deduced as a narrow consolidation zone. Higher trading volumes on August 27 helped Solana conquer the consolidation levels and give a clear and decisive breakout. From the breakout, Solana has faced no resistance until it reached $126. A small profit booking at $126 levels has pushed Solana back to the $105 levels, a fall of over 20% on hourly charts.
But this cryptocurrency managed to respect the trend line and await the MACD bullish crossover to reach higher levels. RSI level on hourly charts is close to neutral levels indicating an inability to create a decisive mood. Nevertheless, such price actions are essential to further the bullish sentiment. Once the MACD crossover happens, it will help reclaim the resistance and trade higher.
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