Solana (SOL) has shown signs of a significant loss in momentum after reaching its highest level in the past 15 months, hitting $68 with its latest recovery on the momentum it has gained. The selling pressure that shook the altcoin was triggered by concerns in the market after Bitcoin failed to surpass the $38,000 resistance and turned downwards. So, has SOL reached an overbought zone at $68 or will the recovery continue? Let’s take a closer look.
The Striking Movement in Solana’s Price
Solana’s price entered a recovery mode from $17.78 in September. With an impressive parabolic recovery, the price of the altcoin reached $68.2 within just 10 weeks, a 293% increase.
During this period, buyers in SOL successfully crossed the daily Exponential Moving Averages (EMA) at the 20, 50, 100, and 200 levels, and important price levels such as $30 and more recently $48 were surpassed. However, after reaching its highest level in the past 18 months at $68.2, SOL faced a pullback to $56.9.
This correction may lead to a retest of the support level at $48.3, which is at the same level as the 38.2% Fibonacci retracement level. However, as long as the price of the altcoin remains above the 50% retracement level at $43, it can be expected to continue moving within the uptrend.
Therefore, a rally that starts after the correction can help buyers sustain the uptrend and support the continuation of the recovery with a rolling bottom formation. The potential price targets for SOL with the support of this formation will be $78.2, followed by $100 and $143.
A Significant Increase in New Wallet Addresses
The number of new wallet addresses created daily on the Solana network is an important indicator of network activity and potential growth. From September 17 to November 17, the number of new wallet addresses created on the network increased from 193,000 to 336,000, indicating an increase in participation and interest in the Solana network. This increase in new wallet addresses typically indicates high demand for SOL and wider adoption of the network.
Furthermore, the upward slope of the 20-day Exponential Moving Average (EMA) during a potential pullback in SOL’s price highlights it as a significant support. The Average Directional Index (ADX), currently at a high level of 74, suggests a possible exhaustion of bullish momentum, indicating a potential need for a decline in SOL.
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