Solana bullish recovery underway? Crypto Analysis for June 5, 2024

After a slight bearish retracement, Solana seems to be regaining strength. Let's look at the future outlook for SOL price.

Location of Solana (SOL)

After reaching a peak at $211, Solana fell by more than 40%, gradually bringing its price back towards $120. This price level served as support for the SOL, subsequently allowing a bullish recovery which brought its price above $170. So, buying interest in Solana appears set to continue.

At the time of writing, the price of Solana is trading around $173. Solana's medium to long term trend remains bullish, as evidenced by the 50 and 200 day moving averages. As for the oscillators, we can see that they illustrate, like the price itself, a slight resumption of the upward dynamic of the cryptocurrency.

The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today trainer at Family Tradinga community of thousands of own-account traders active since 2017. You will find Lives, educational content and mutual assistance around the financial markets in a professional and warm atmosphere.

Focus on Solana derivatives (SOLUSDT)

SOL/USDT contracts have evolved in the same way as cryptocurrency. This suggests that speculators were mainly biased towards buying. This hypothesis could be confirmed by funding rates that have increased significantly, demonstrating a price differential between SOL/USDT contracts due to significant upward pressure on these contracts. On the liquidation side, we can see that short positions have recently been more marked than those of buyers, which should reinforce this buying conviction.

The three-month SOL/USDT liquidation heatmap shows that the cryptocurrency has recently broken through a liquidation zone just below $170. It seems that this phenomenon has led to an upward movement, demonstrating buying interest at this level. Now, the sharpest liquidation zones are on either side of its current price. We can note, below the latter, the area around $160. Above that, the area between $185 and $195 is also notable. Price approaching these levels could result in a massive triggering of orders, increasing the risk of a period of heightened volatility for Solana. These areas therefore represent a crucial point of interest for investors.

Assumptions for the price of Solana (SOL)

• If the price of Solana remains above $170, we could anticipate a bullish continuation to the level of $190, or even $200. The next resistance to consider, if the upward movement continues, could be $210, and beyond that, Solana's all-time high at $265. At this point, that would represent an increase of more than 50%.

• If the price of Solana fails to stay above $170, we could envisage a return to levels of $145, or even $125. The next support to consider, if the bearish movement continues, would be $110. At this point, that would represent a drop of less than 37%.

Conclusion

Solana showed its ability to recover after a period of decline, finding stable support that promoted a renewed buying force. Solana's technical indicators and structure suggest a continued positive trend, hinting at positive fluctuations for the future. However, it will be crucial to carefully observe the price reaction at different key levels to confirm or refute the current assumptions. It is also important to remain vigilant against potential “fake outs” and “market squeezes” in each scenario. Finally, let us remember that these analyzes are based solely on technical criteria and that the price of cryptocurrencies can also evolve quickly depending on other more fundamental factors.