In search of relative strength against the rest of the market, Solana could rely on its supports to relaunch vigorously at the start of 2025. Will this movement allow it to reach its historic peak again and continue its trend? weekly ?
Solana, relative strength is reviving?
It is Tuesday, January 7, 2025 and the price of Solana's SOL cryptocurrency is around $213.
Since mid-November, SOL has suffered from a loss of relative strength in the crypto market. This state of affairs is probably linked to the slowdown of the memecoin narrative and the various excesses on the pump.fun platform.
As a result, the Solana dominance chart (SOL.D), much like the charts against Bitcoin and Ethereum, has corrected, revisiting key support zones. For 2 weeks, these areas of major interest have sparked a reaction in the asset, which seems to be starting a rebound. This movement could mark the start of a new phase of outperformance for SOL.
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From a speculative point of view, the Solana token remains one of the most popular assets among traders, with volumes on derivatives markets approaching $5 billion over the last 24 hours. However, open interest, which measures the total capital committed to derivative contracts, has lost 20% since its peak in early December.
Although the amount of open interest remains above the 2024 average, funding data, reflecting the gap between the spot price and perpetual contracts, has rebalanced, even briefly falling into negative territory on January 3.
These elements illustrate a consolidation of the market around the Solana token, which is precisely the objective of consolidation phases within a trend. This market purge could nevertheless continue if impulsive movements are accompanied by a sharp increase in open contracts.
Now ranked 6th among cryptocurrencies, with a capitalization of $103.96 billion, Solana crypto remains one of the strongest assets in recent months. So, can the bullish rally restart for SOL? What are the levels to monitor going forward?
| Pairs with Solana | 24 hours | 7 days | 1 month |
| Solana/USDT | 0.00% | +11.30% | -8.30% |
| Solana / Bitcoin | -2.60% | +3.00% | -10.50% |
| Solana / Ethereum | -0.60% | +2.90% | -1.20% |
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Solana, deviation then reconquest, the ideal scenario for a revival
SOL is one of the best performing assets of the year 2024. In an underlying upward trend, it attracts strong attention from operators, because the probability of a continuation of this trend remains higher than a major turnaround.
The correction initiated at the end of November, however, managed to reverse the daily trend, pushing the market pivot to $200. The weekly trend remained unchanged, marking a major low point at $175.
To maintain this weekly trend, Solana must break its all-time high. If it fails to make a new high and subsequently crosses $175 on the downside, the asset would then reverse its trend, setting up a medium-term bearish structure.
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However, the deviation below the $200 pivot followed by its reintegration militates in favor of a bullish reconstruction scenario targeting historic highs. The daily trend has reoriented upwards, leaving important support levels below the current price.
If the 50-day moving average now constitutes a barrier, suggesting that consolidation could occur, the levels to watch downwards are :
- The confluence of the 50% retracement of the US election-related bullish leg and the 0.236 Fibonacci retracement of the last impulse. The $210 level thus determined has already caused price action to react several times in the past;
- The confluence of the 0.618 Fibonacci retracement of the US election bull leg and the 50% retracement of the last bull leg. The $200 threshold also marks the lower part of our pivot zone (in blue), in which the 20-day moving average is currently moving.
These 2 areas of interest will need to be monitored closely if Solana corrects. Furthermore, a daily close below $200 would send a negative signal to the market. However, it remains possible to revisit this zone provided that the movement is brief, marking a final hunt for liquidity.
On the rise, the signal of a continuation could materialize by a closing crossing of the highs of January 6, located at 223 dollars.
Solana daily price graph
In summary, Solana is going through a consolidation phase. The re-entry above $200, after a deviation below this support, constitutes a good signal. However, it will be necessary to maintain the weekly trend by setting a new all-time high in order to relaunch the bullish rally.
So, do you think SOL can continue towards its ATH? Don't hesitate to give us your opinion in the comments.
Have a nice day and we'll see you soon for a new technical analysis of altcoins.
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Sources: TradingView, Coinglass, Glassnode
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Investments in cryptocurrencies are risky. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your capacity to lose part of this savings. Do not invest if you are not prepared to lose all or part of your capital
Analyst at Cryptoast Research for several years, I carry out in-depth monitoring of the crypto market to analyze the next narratives while keeping an eye on the financial markets.
Emmanuel Lazaro
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