Solana (SOL) recently crossed the $100 mark, reflecting positive sentiment and rising decentralized finance (DeFi) volumes. However, after Federal Reserve Chief Jerome Powell hinted at postponing rate cuts beyond March 2024, crypto prices, including SOL, experienced a 12.5% dip.
This pullback was more significant than the average decline in altcoin markets, signaling potential undervaluation. The volatility sets the stage for a major rebound when industry sentiment turns bullish. Despite the recent dip, SOL’s fundamentals remain strong, with its dominance in the DeFi sector increasing from 16.5% to 26.9% in January.
Solana’s trading volumes in DeFi surpassed Arbitrum and Ethereum (ETH), indicating high demand for native tokens. The positive speculations surrounding the Jupiter (JUP) token airdrop further contribute to Solana’s growing DeFi activity.
From an on-chain perspective, SOL appears oversold, suggesting potential for recovery. The upcoming Jupiter airdrop and increased DeFi volumes could act as catalysts for a breakout towards $120. The Bollinger Bands indicator supports this outlook, indicating a recovering SOL price. However, a potential resistance at $103 needs to be overcome for a decisive breakout to $120. On the downside, a reversal below $80 could invalidate the bullish prediction, with support likely at $83.
Despite recent market fluctuations, Solana’s strong position in the DeFi space and positive indicators make it a contender for further price appreciation in the coming weeks.
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