Solana’s network activity has surged significantly and the current drop in the SOL price could be short-lived leading to a trend reversal soon.
Amid strong sell-off in the broader cryptocurrency market, Ethereum Layer-1 competitor Solana is also facing some selling pressure. In the last 24 hours, the Solana (SOL) price has tanked by over 3% slipping under $70.
SOL is trading nearly 10% down from its 2023 peak attained last week, however, it still maintains 13% gains on the weekly charts.
Solana price continues to maintain its position above $66. A significant bullish trend line is emerging with support around $65.00 on the 4-hour chart for the SOL/USD pair.
Photo: TradingView
This trend line aligns closely with the 50% Fibonacci retracement level of the upward movement from the $53.50 swing low to the $77.72 high. The immediate resistance on the upside is around $72.00, followed by a more substantial barrier near $75.00.
The primary resistance level is presently at $78, and a successful close above this level could pave the way for a more extensive upward movement. The subsequent key resistance lies near $82.50, and further gains might propel the price toward the $86.52 level.
In the event that SOL struggles to surpass the $72.00 resistance, downside momentum may persist. Initial support is anticipated around the $68.00 level, with the primary support at $65.00, coinciding with the trend line. A breach below this support could lead to a test of $62, and a subsequent close below $62 might prompt a decline towards the $55 support in the near term.
DeFi and NFT Demand on Solana
The Solana blockchain network has been witnessing a strong activity surge, especially in the decentralized finance (DeFi) and the NFT market. Moreover, Solana has experienced a rise in Total Value Locked (TVL), reaching around $670 million as of December 5, as per DefiLlama data. However, this figure still stands significantly below the levels recorded in the last quarter of 2021, during which SOL’s price surged to over $250, and the TVL surpassed $10 billion.
The Solana blockchain has garnered attention by surpassing Ethereum in NFT trading volumes on Friday. This surge in Solana’s trading activity marks the culmination of a successful week for the network.
Jito, a liquid staking protocol, conducted a substantial airdrop on Thursday, distributing $165 million worth of its native token to users. The subsequent day witnessed a significant increase in Solana’s NFT sales, with transactions totaling nearly $15 million. Following Jito’s success, Solana-based Kamino Finance is also preparing for a points program along with its token drop.
Notably, there was a notable uptick in activity on Tensor, an NFT market built on Solana, potentially driven by speculations about another upcoming airdrop. On Friday, the “Tensorians” NFT collection from Solana led the sales volume charts, experiencing a sales volume surge of over 100% in the past week, according to CryptoSlam
