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- Solana’s recent surge sees it flip Dogecoin and Cardano in market capitalization.
- Despite the impressive gain, some indicators suggest potential selling pressure.
Amid a prevailing bullish sentiment in the crypto landscape, Solana’s [$SOL] price has recently surged to unprecedented levels. This surge isn’t just a mere green tick on the chart; it’s a significant gain that has taken many in the crypto community, including investors, by surprise.
As the market was enjoying its momentum, Solana’s spike came as a cherry on top, especially when the blockchain’s Total Value Locked (TVL) saw a notable rise. Nevertheless, a deep dive into Solana’s ecosystem intimates that this bullish trend may not be as enduring as optimists believe. DEGEN NEWS 🗞️ @DegenerateNews recently highlighted this shift, announcing,
— DEGEN NEWS 🗞️ (@DegenerateNews) September 30, 2023
Solana hasn’t just seen a minor uptick. According to data from CoinMarketCap, SOL’s price has catapulted by an impressive 25% in the last week, with a 14% leap occurring in just the past day. The token now boasts a trading price of $24.36 and a market cap surpassing $10 billion. This incredible rally didn’t just push Solana up the charts; it allowed the crypto to surpass stalwarts like Dogecoin [DOGE] and Cardano [ADA], making Solana the seventh-largest cryptocurrency by market capitalization.
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A more in-depth look at this growth reveals that Solana’s price increase was bolstered by an over 100% spike in its 24-hour trading volume. But the price wasn’t the sole achiever. Solana’s DeFi performance and TVL, standing at $1.15 billion as per DeFiLlama, have both seen substantial growth, adding to the overall positive sentiment.
The prevailing question now is: can Solana maintain this surge? Data from Santiment indicates that the sudden rise in SOL’s price has led to a notable spike in its 1-week price volatility, hinting at a potential further price increase. Factors like Solana’s increasing open interest and SOL’s green Binance funding rate, which indicates a higher purchasing price for SOL by derivatives buyers, both align with a continued upward trajectory.
However, not all indicators are pointing north. A closer observation of Solana’s daily metrics shows potential headwinds. The Relative Strength Index (RSI) for Solana has entered the overbought territory, signaling a possible increase in selling pressure. Even though the Chaikin Money Flow (CMF) remains favorable for bulls, Solana’s Money Flow Index (MFI) suggests a potential downtrend.
“Given the mixed indicators, it remains unclear if Solana’s price explosion is sustainable in the long run. While some metrics indicate continued growth, others hint at possible corrections. Only time will provide a clear answer, but for now, investors should tread with caution”.
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