- SOL has achieved a milestone with a 10% increase this week, outpacing other cryptocurrencies.
- Nonetheless, this does not ensure an escape from its current consolidation phase.
Solana [SOL] has witnessed a remarkable 10% rise this week, nearing the significant $160 resistance level, which it has grappled with unsuccessfully, encountering rejection on four occasions over the last three months.
Currently, attention is focused on SOL, as a clear breakout above $160 could pave the way for a movement towards the sought-after $200 target.
The importance of $160
Source: Coinalyze
Since late July, Solana has been confined to a narrow trading range between $110 and $160, following a close near $190. Throughout this period, despite Bitcoin undergoing two bullish cycles that saw it exceed $66K, SOL has attracted little additional capital.
Yet, bulls have displayed strength, keeping SOL from declining to a fresh local low. However, this determination may still be insufficient to initiate a breakout.
For SOL to make a significant movement, it must break away from this consolidation by surpassing the $160 resistance.
The almost 10% weekly increase fuels optimism, especially as SOL has been outperforming numeroustop altcoins.
This has led analysts at AMBCrypto to speculate: are investors prepared to transfer capital from BTC to SOL? If so, we could witness Solana experience notable growth.
Interest in SOL is heating up, but with caveats
Positioned as the “Ethereum killer,” Solana has created a mechanism that enables rapid transactions, currently managing over 3,000 TPS.
Moreover, after a tumultuous end to September, characterized by a dramatic drop in active wallet numbers from nearly half a million to 800,000 within just two weeks, October has brought a resurgence in liquidity.
During this period, active wallets reached an all-time high.
Source: SolScan
Despite these accomplishments, SOL’s price hasn’t responded as anticipated. A potential reason could be a deficiency in aggressive accumulation by traders, who might not perceive the current price as a viable bottom.
If this behavior continues, the likelihood of a rebound may diminish, marking the fifth consecutive instance of the $160 resistance going unchallenged.
An AMBCrypto report pointed out the rising activity in the futures market, with open interest (OI) experiencing a sharp rise to $2.45 billion, indicating a bullish sentiment for SOL.
However, this momentum can also pose risks, making SOL more susceptible to sudden fluctuations that could wipe out the gains achieved in the past week as liquidations are triggered.
Is your portfolio performing well? Check out the SOL Profit Calculator
In summary, SOL stands at a pivotal junction. While recent upward momentum has kept SOL positive, a price retracement and consolidation may be on the horizon.
This probable pullback is primarily due to the absence of aggressive purchases from investors, who appear hesitant to recognize current price levels as a golden opportunity. Hence, proceeding with caution is advised.
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