The Solana blockchain, has a native cryptocurrency, the SOL utility token. SOL is utilized to pay transaction fees when transferring funds and availing smart contracts on the blockchain.
Anyone holding SOL tokens can use applications on the network, correspondingly anyone holding ETH can use applications on the Ethereum blockchain. Though Ethereum uses the ERC token protocol, Solana uses the SPL protocol.
Solana is a high-speed blockchain generated by former Qualcomm, Intel, and Dropbox engineers that utilizes a decentralized Proof-of-Stake (dPoS) consensus algorithm. The network uses a distinct way of ordering transactions to enhance its pace and throughput greatly.
Blockchain networks have historically countered scalability issues, with the few that managed to solve them dealing with centralization issues. A decentralized network with short confirmation times and transaction fees has been hard to make, but the issue was solved in 2017 with the creation of Solana.
Using Proof-of-History (PoH), the Solana blockchain can handle thousands of transactions per second. PoH uses Verifiable Delay Functions to hash incoming events and transactions to allow nodes to locally generate timestamps of SHA256 computations, eliminating the need for timestamps to be broadcast across the network.
The Proof-of-History mechanism has been used before and aids Solana’s Proof-of-Stake structure. Staking on Solana includes delegating tokens to validators who process transactions on the network, making it a delegated Proof-of-Stake (dPoS) system.
Technical Analysis of SOL Crypto Price in the 1-D Time Frame
The SOL crypto price was in a swift uptrend from October 2023, the crypto surged from $20 to $120 and gave investors a delight of almost 300%.
The journey of the SOL crypto seems wonderful. Still, the crypto exhibited a solid sign of deterioration as the price tumbled from a crucial level of around $120 on the charts, and it started making lower highs and lows.
Now, the SOL crypto could fall big as it meets the trendline resistance and dives by following it closely. Furthermore, the SOL asset is showing bearish signs and has the potential to fall further. It has performed poorly in the past week, falling by 3.36%, indicating a strong downtrend.
The CMP is at $98.38 with an intraday loss of 3.64%, with a trading volume of 2.888 Billion in the last 24 hours, the price action seems bearish and can drop to lower levels.
Therefore, if the market fails the lower swing level of $90, it can deteriorate more. On the flip side, if it managed to cross the trendline resistance, it could aim back to $120, and in between the first resistance could be $107, which is the upper swing.
Looking at the EMAs, the price is barely standing on their dynamic support as of now, but its face is downward and could drop lower and conquer the dynamic supports of the below EMAs.
Moreover, the SOL crypto asset is exhibiting bearish weakness as MACD has given a bearish cross with widening histogram value and the RSI is falling and approaching cross 50 and aiming to reach the oversold region, implying that the asset is going to be in a negative territory soon and can sink further.
Summary
The Solana price was in an uptrend earlier and gave good performance on the chart till December end 2023. Later on, the price faced rejection from the supply region and has been in a continuous downtrend since then onwards. Now, the price action of Solana is bearish and the technical indicators are confirming the bearish outlook on the daily time frame chart.
Technical Levels
Support Levels: $90
Resistance Levels: $107
Disclaimer
In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
Source: https://www.thecoinrepublic.com/2024/01/19/solana-crypto-will-sol-crypto-price-drop-further-or-rise/