Just as technical analysis (TA) indicated in mid-October, Solana (SOL) has been going through a significant rally over the previous weeks and is up more than 149% over the previous month.
The surge caused many investors and traders to wonder whether it is sustainable or if the cryptocurrency will soon collapse in price.
Indeed, the current Solana rally has striking similarities to the one that occurred in April and May 2021, when it also rose to $53 and $61 levels, as pointed out by crypto market expert Rekt Capital on X. Additionally, two years ago, SOL retraced below $30 and even below $25 at some points – the levels seen prior to the ongoing rally.
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Still, while the data on Solana’s past performance only reinforces the concerns that its price might experience a significant drop and erase last month’s gains, it is worth pointing out that there is room for optimism should history repeat itself.
Shortly after retracing in the late spring of 2021, SOL entered into another rally, surging to its all-time-high levels of about $250.
Did the retracement already start?
The price of Solana experienced a notable drop over the course of the previous 24 hours, falling 6.45% by the time of publication to the price of $55.25. The decline is likely the result of downward pressure caused by another round of selloffs of FTX assets.
The bankrupt firm moved $13.5 million worth of SOL, $7.41 million worth of Polygon (MATIC), and $3.1 million worth of Ethereum (ETH) to Kraken and OKX cryptocurrency exchanges in the previous 12 hours, based on the data curated by the X account Look On Chain.
The pressure from the sale of FTX assets has been expected since September, when the firm received approval to liquidate some of its holdings. Indeed, the fallen company already offloaded $100 million worth of SOL in the 10 days leading up to November 3.
Ultimately, it is likely the bulk of the current drop has been caused by FTX’s activity paired with the voluntary offboarding of Lido DAO node operators from the chain in accordance with a vote held in late September and not by a broader shift in market sentiment.
Can the SOL rally reignite?
It isn’t necessary to hope that a rally similar to the one from the summer of 2021 will repeat to remain optimistic about the future of Solana. While the rally led by Bitcoin (BTC) since the second half of October appears to have temporarily slowed, enthusiasm for the crypto market as a whole remains markedly high.
Additionally, Solana is likely to receive another boost as soon as November 14, as Coinbase (NASDAQ: COIN) is expected to launch perpetual futures trading both for SOL and Avalanche (AVAX) as soon as liquidity conditions are met.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
