Solana’s price rallied over 6% to a five-week high of $94 on Monday amid a broader market rebound.
Summary
- Solana price rallied to a five-week high near $94 as the broader crypto market rebounded after Bitcoin moved above the $74,000 level.
- The rally was supported by short liquidations and rising derivatives activity, with SOL futures open interest increasing over the past day.
- Spot Solana ETFs also extended their inflow streak, recording another week of net inflows and boosting investor sentiment around the token.
According to data from crypto.news, Solana (SOL) price rose nearly 7% to $94.07 on March 16, reaching its highest level since early February.
The seventh leading crypto asset by market cap rallied during a market-wide recovery after Bitcoin (BTC), the bellwether crypto asset, surpassed the $74,000 psychological resistance level, as investors rotated capital away from traditional safe-haven assets like gold and silver, which have tanked recently after hitting new highs.
The altcoin’s price also gained significant support from a short squeeze that followed shortly after its rebound near $90, where several short positions were concentrated. When short positions are liquidated, traders are forced to buy back the asset to cover their losses, which triggers a rapid upward price spiral as buying pressure intensifies.
Its leveraged markets also played a pivotal role in this momentum. Notably, SOL futures open interest increased by 7% over the past 24 hours, a sign that more liquidity was entering the market.
Meanwhile, spot Solana ETFs, which recorded their fifth consecutive week of net inflows by bringing another $106 million into the investment products, have also uplifted investor sentiment surrounding the token.
On the daily chart, the Solana price is eyeing a breakout from an ascending parallel channel pattern, a popular bullish continuation pattern in technical analysis.
The 20-day simple moving average is also close to confirming a bullish crossover with the 50-day. A bullish crossover between these moving averages has historically signaled the start of a sustained uptrend. Additionally, the Relative Strength Index has been moving upwards after some consolidation in the neutral zone.
Hence, the path of least resistance for Solana suggests a move above the $100 psychological threshold over the coming sessions. A decisive break further above the $100 mark could embolden bulls to target the 100-day SMA at $110 as the next major resistance level.
On the contrary, if bullish momentum fails, the Solana price could revisit the 50-day SMA at $90, a drop below which can invalidate the current bullish thesis and lead to a deeper correction toward the $80 support zone.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
