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Solana (SOL) has been in a positive mood since March 10, advancing from a low of $16.08 to a high of $23.93. The current Solana (SOL) price stands at $20.12, and despite the recent correction, bulls still control the price movement.

However, investors should continue to take a defensive investment approach in the second quarter of 2023 as the effect of the 2022 crypto price crash, U.S. inflation growth, and interest rate hikes haven’t diminished from the market yet.

Today, the Crypto Lists website will discuss Solana (SOL) price estimates from a technical and fundamental analysis perspective. Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk, and how much margin you have if trading with leverage.

One the best performing blockchains in the world

Solana is one the most performant blockchain in the world that is designed to keep fees low for applications with billions of users. The average fee per transaction is around $0.00025, and according to its official website, Solana can process 50k transactions per second. Solana’s ecosystem covers a number of lending protocols, DeFi projects, NFT marketplaces, Web 3.0 apps, and decentralized exchange (DEX) projects.

SOL cryptocurrency plays a key role in maintaining and operating the Solana ecosystem, and the price of this cryptocurrency was trading above $140 in March 2022. Since then, the price of Solana (SOL) has been moving down, while the biggest selling pressure came after the FTX crypto giant went bankrupt. Sam Bankman-Fried, the founder of FTX, was a huge investor and proponent of Solana, and because of this, the collapse of FTX had an even bigger influence on Solana than on some other cryptocurrencies.

Rating: 9.4/10
Supply: 307,782,016 / 511,216,000
Release date: April 10, 2019

Description: Buy Solana and be part of the smart contract revolution!

Risk warning: Trading, buying or selling crypto currencies is extremely risky and not for everyone. Do not risk money that you could not afford to loose.


Alameda Research as a main investor

Alameda Research, part of the FTX empire, was also one of the main investors in the Solana blockchain, and as of April 6 2023, Alameda still held a little over 45.6 million SOL locked and staked, representing 71.7% of all locked staked Solana and 9.9% of all staked SOL. Those coins could well be in the hands of liquidators, and as they look to pay back obligations, they may liquidate their crypto assets, which could trigger a sell-off in the crypto market.

In the mid-term, this situation will continue to influence Solana negatively, but despite this, SOL has doubled in value since the beginning of the 2023 year. According to the CoinShares report, the volume of inflows from Solana-focused investment products (SOL) has grown by more than $5 million since the start of the year, more than any other altcoin except Ethereum (ETH).

At the same time, the Solana network itself has also experienced a resurgence of interest, with daily active users returning to levels above 150,000, representing a significant increase since the collapse of FTX.

The price forecasts, especially for something as potentially volatile as cryptocurrencies, often end up being wrong, but according to CoinCodex, the price of Solana could drop again below $20 before rebounding above $24 in May 2023. DigitalCoinPrice and CoinPriceForecast were more upbeat in their Solana crypto price prediction, and according to them, Solana could be above $35 by the end of the 2023 year.

Despite this, investors should continue to take a defensive investment approach in the second quarter of 2023, especially because the cryptocurrency market remains extremely volatile, making it difficult to predict accurately what a coin’s price will be in a few hours, and even harder to come up with a long-term target price.

Market turbulence continues?

There are also expectations of “some market turbulence” from looming recession concerns and macro uncertainty, while the analysts said that the U.S. central bank could keep interest rates at restrictive levels for a longer period. The effect of the 2022 crypto price crash, U.S. inflation growth, and interest rate hikes haven’t diminished from the market yet.

At the same time, employment data for March showed that the U.S. added 236,000 new jobs last month while the unemployment rate dipped to 3.5% from 3.6%. According to CME’s FedWatch Tool, the jobs report heightened expectations the Fed will raise rates at its next meeting, with the market pricing in a 69% chance for a 25 basis point rate hike.

According to the World Bank, global growth this year is expected to decelerate sharply, reflecting synchronous policy tightening aimed at containing very high inflation, worsening financial conditions, and continued disruptions from Russia’s invasion of Ukraine.

Technical analysis for Solana (SOL)

Solana (SOL) has advanced from $16.08 to $23.93 since March 10, 2023, and the current price stands at $20.12. Solana (SOL) might have a hard time holding above the $20 level in the upcoming days, and a break below this level would indicate that SOL could probably test the price level at $18.

Technical analysis for Solana (SOL)

Important support & resistance levels for Solana (SOL)

Important support & resistance levels for Solana (SOL)

On this chart (the period from June 2022), I marked important support and resistance levels that can help traders to understand where the price could move. Solana (SOL) has weakened from its recent highs, but if the price jumps above the resistance that stands at $25, the next target could be resistance at $30.

The current support level is $20, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $18. If the price drops below $15, which represents an important psychological support level, the next target could be located around $10 or even below.

What speaks for the rise in the Solana (SOL) price

The upside potential for Solana (SOL) probably remains limited for April 2023; still, if the price advances above the resistance that stands at $25, the next target could be resistance at $30. Traders should also consider that the price of Solana (SOL) is correlated with Bitcoin, and if the price of Bitcoin jumps above $30000, we can see this cryptocurrency at a higher price level than the current price.

What indicates the downfall of Solana (SOL)

The beginning of the 2023 year has been successful for Solana (SOL), but investors should continue to take a defensive investment approach as the macroeconomic landscape remains uncertain. Investors should also keep in mind that Alameda still held a little over 45.6 million SOL locked and staked, representing 71.7% of all locked staked Solana and 9.9% of all staked SOL.

Those coins could well be in the hands of liquidators, and as they look to pay back creditors, they may liquidate their crypto assets, which could trigger a sell-off in the crypto market.

What do analysts and experts say?

Solana (SOL) has doubled in value since the beginning of the 2023 year, but investors should keep in mind that the macroeconomic landscape remains uncertain. Major central banks continue with an aggressive stance to fight inflation by raising interest rates, and risk-on assets such as cryptocurrencies could suffer again in such conditions.

According to CoinCodex, the price of Solana could drop again below $20, while some analysts say that Solana could be above $35 by the end of the 2023 year. The positive news is that the Solana network has experienced a resurgence of interest, with daily active users returning to levels above 150,000, representing a significant increase since the collapse of FTX.

Disclaimer: Crypto is extremely volatile and not suitable for everyone to invest in. Never speculate with money that you cannot afford to lose. The information on this site is presented for educational purposes only and should not be construed as investment or financial advice.

by Our Certified Author
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