Solana jumps past key selloff junction: SOL price eyes $150 in April

Solana jumps past key selloff junction: SOL price eyes $150 in April

SOL price enters overbought territory but history shows that bulls are not scared of Solana’s excessive valuations.

Solana (SOL) jumped past a critical resistance level that had limited its recovery attempts during the November 2021-March 2022 price correction multiple times, thus raising hopes of more upside in April.

Solana flips key resistance to support

To recap, SOL’s price underwent extreme pullbacks upon testing its multi-month downward sloping trendline in recent history.

For instance, the SOL/USD pair dropped by 60% two months after retracing from the said resistance level in December 2021. Similarly, it had fallen by over 40% in a similar retracement move led by a selloff near the trendline in November 2021.

SOL/USD daily price chart. Source: TradingView

But Solana flipped the resistance trendline as support (S/R flip) after breaking above it on March 30, accompanied by a rise in trading volume that showed traders’ conviction in the breakout move. In doing so, SOL’s price rallied by 25% to reach $135, bringing the psychological resistance level of $150 within reach.

Why is SOL (technically) bullish?

From a technical perspective, SOL’s breakout move above its falling trendline resistance coincided with a bullish crossover between its two key moving averages: the 20-day exponential moving average (20-day EMA; the green wave) and the 50-day EMA (the red wave).

Dubbed the golden cross, the technical indicator occurs when an asset’s short-term moving average jumps above its long-term moving average. Traditional analysts consider this crossover as a buying signal.

SOL/USD daily price chart featuring ‘Golden Cross.’ Source: TradingView

For instance, the 20-50 EMA crossover in August 2020 may have assisted in pushing SOL’s price upward by more than 650% to over $267, in addition to other fundamental and technical catalysts. As such, the golden cross boosts SOL’s likelihood of continuing its rally, as well as its breakout above the falling trendline resistance.

RSI divergence

The upside prospects increase further if a technical fractal highlighted by Delphi Digital is to be believed.

The crypto research firm highlighted a correlation between SOL’s price and the combination of its two technical indicators: the S/R flip and relative strength index (RSI) divergence.

Notably, the first time Solana’s RSI jumped above 70, an “overbought” area, after a strong price uptrend — that had it also break above the descending trendline support of that period — SOL tended to continue rallying despite its RSI consolidating lower or sideways. 

Solana daily price chart featuring S/R flip and RSI divergence. Source: Delphi Digital

For instance, SOL rallied 378% after the first time its RSI broke above 70 in August 2021. Similarly, the period of an overbought RSI during May-June 2021 also coincided with Solana’s 268% upside move. The fractals appeared similar to how SOL has been performing lately, suggested Delphi Digital.

Related: Opera integrates Bitcoin, Solana, Polygon and five other blockchains

Therefore, SOL/USD could continues its uptrend when using Fibonacci retracement levels, drawn between $261-swing high to $77.50-swing low, suggesting $147-$150 as the interim upside target.

SOL/USD daily price chart. Source: TradingView

Conversely, a pullback upon or ahead of testing the $147-$150 price range can result in SOL retesting the $120 as its interim support, with a possible slide toward the 20- and 50-day EMAs.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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Price analysis 4/1: BTC, ETH, BNB, SOL, XRP, ADA, LUNA, AVAX, DOT, DOGE

Price analysis 4/1: BTC, ETH, BNB, SOL, XRP, ADA, LUNA, AVAX, DOT, DOGE

Bulls set their targets on new highs now that the brief consolidation phase in BTC and altcoins appears to have ended.

Bitcoin (BTC) has clawed back much of the losses that took place in January and now the focus of traders shifts to April, which has historically been a strong month for the cryptocurrency. According to Coinglass data, Bitcoin has closed April in the red on onlthree occasions and the worst monthly loss was a 3.46% drop in 2015. 

Although history favors the bulls, the Whale Shadows indicator has noticed that more than 11,000 Bitcoin has left a wallet in which it had been lying dormant for seven to ten years. The movement of similar-sized quantities from dormant accounts has generally resulted in a major top, according to independent market analyst Phillip Swift.

Daily cryptocurrency market performance. Source: Coin360

Along with keeping an eye on the crypto markets, traders should also track the performance of the U.S. stock markets for clues because Bitcoin has been closely correlated to the equity markets for the past several weeks.

Could bulls clear the overhead hurdle in Bitcoin and select altcoins and extend the strong recovery from the lows? Let’s study the charts of the top-10 cryptocurrencies to find out.

BTC/USDT

Bitcoin turned down from the 200-day simple moving average (SMA) ($48,291) on March 29 and dipped to the 20-day exponential moving average (EMA) ($43,935) on April 1. The long tail on April 1’s candlestick suggests that buyers are accumulating on dips.

BTC/USDT daily chart. Source: TradingView

The bulls will make another attempt to push the price above the 200-day SMA. If they manage to do that, the BTC/USDT pair could rally to $52,000 where the bears may again mount a strong resistance.

Alternatively, if the price once again turns down from the 200-day SMA, it will suggest that bears have erected a strong barrier at this level. The pair could thereafter consolidate between the 20-day EMA and the 200-day SMA for a few days.

A break and close below the 20-day EMA will suggest that the bullish momentum has weakened. That could result in a decline to the 50-day SMA ($41,461).

ETH/USDT

Ether (ETH) turned down from the 200-day SMA ($3,488) on March 29 but the shallow correction and the sharp recovery suggest strong demand at lower levels.

ETH/USDT daily chart. Source: TradingView

The rising 20-day EMA ($3,098) and the relative strength index (RSI) near the overbought zone indicate that bulls are in control.

If buyers propel the price above the 200-day SMA, the bullish momentum could pick up further and the ETH/USDT pair could rally to the psychological level at $4,000.

Contrary to this assumption, if the price once again turns down from the overhead resistance, it will suggest that bears are unwilling to relent. The bears will then try to pull the pair below the 20-day EMA. If they succeed, the pair could drop to the 50-day SMA ($2,860).

BNB/USDT

BNB broke above the overhead resistance at $445 on March 30 and 31 but the bulls could not sustain the higher levels.

BNB/USDT daily chart. Source: TradingView

The bears pulled the price to the 20-day EMA ($413) on April 1 but the strong rebound off the level suggests strong buying by the bulls at lower levels.

If bulls push and sustain the price above $445, the BNB/USDT pair could rise to the 200-day SMA ($467) and then make a dash to the psychological level at $500.

This positive view will invalidate in the short term if the price turns down from the current level and plunges below the moving averages. The pair could then remain range-bound between $350 and $445 for a few more days.

SOL/USDT

Solana (SOL) had been witnessing a tough battle between the bulls and the bears near the critical level at $122. The long wick on the March 31 candlestick indicated selling at higher levels but the bears could not sustain the price below $122 on April 1.

SOL/USDT daily chart. Source: TradingView

This suggests that the bulls aggressively purchased on the minor dip. The buyers have pushed the price above the overhead resistance at $122, indicating the start of a potential new uptrend.

The SOL/USDT pair could now challenge the 200-day SMA ($150). If bulls overcome this barrier, the next stop could be $163.

Conversely, if the price fails to sustain above $122, it will suggest that the demand dries up at higher levels. The pair could then drop to the 20-day EMA ($103).

XRP/USDT

Ripple (XRP) formed an inside-day candlestick pattern on March 30, which resolved in favor of the bears on March 31 with a sharp down move. This suggests that the buyers who may have purchased at lower levels closed their positions aggressively.

XRP/USDT daily chart. Source: TradingView

The 20-day EMA ($0.82) is flattening out and the RSI has dropped close to the midpoint, suggesting that the bullish momentum may be weakening. If the price breaks below the 50-day SMA ($0.78), the XRP/USDT pair could slide to the next support at $0.70.

Contrary to this assumption, if the price rises from the current level, the buyers will try to drive the pair above $0.86 and again challenge the resistance at $0.91. A break and close above this level could open the gates for a possible rally to the psychological level at $1.

ADA/USDT

Cardano (ADA) turned down from the overhead resistance at $1.26, suggesting that the bears are defending the level with vigor. The price could now drop to the 20-day EMA ($1.05), which is an important level to keep an eye on.

ADA/USDT daily chart. Source: TradingView

If the price rebounds off the 20-day EMA, the buyers will make one more attempt to push the ADA/USDT pair above $1.26. If they manage to do that, the pair will complete an inverse head and shoulders pattern. This setup will suggest that the pair may have bottomed out.

The pair could then rally to the overhead resistance zone between the 200-day SMA ($1.50) and $1.63 where the bears may mount a strong resistance. This bullish view will be negated in the short term if the price breaks and sustains below the 50-day SMA ($0.95).

LUNA/USDT

Terra’s LUNA token turned down after hitting a new all-time high on March 30, indicating that the bears are attempting to stall the uptrend. However, a minor positive is that the bulls have not allowed the price to break below $96. This suggests that the bulls are attempting to flip this level into support.

LUNA/USDT daily chart. Source: TradingView

The rising 20-day EMA ($95) suggests advantage to buyers but the negative divergence on the RSI indicates that the bullish momentum could be weakening. If buyers push the price above $111, the uptrend could resume. The LUNA/USDT pair could then rally to $125.

Contrary to this assumption, if the price turns down from the current level or the overhead resistance and breaks below the 20-day EMA, it will suggest that the traders are aggressively booking profits. The pair could then drop to the 50-day SMA ($80).

Related: ApeCoin risks another massive selloff as APE drops 70% in two weeks — Here’s why

AVAX/USDT

Avalanche (AVAX) broke above the overhead resistance at $98 on March 30 and 31 but could not sustain the higher levels. This may have invited profit-booking by the short-term traders.

AVAX/USDT daily chart. Source: TradingView

Although the bears pulled the price to the 20-day EMA ($87), the long tail on the day’s candlestick suggests strong demand at lower levels. The bulls are attempting to drive and sustain the price above the overhead zone between $98 and $100.

If they manage to do that, the AVAX/USDT pair could pick up momentum and rally to $120. Conversely, if the price once again turns down from the overhead resistance, it will suggest strong selling at higher levels. That could pull the price to the moving averages.

DOT/USDT

The failure to break above the $23 resistance may have attracted profit-booking by the short-term traders in Polkadot (DOT). That pulled the price down to the 20-day EMA ($20) on April 1.

DOT/USDT daily chart. Source: TradingView

The strong rebound off the 20-day EMA suggests buying on dips. The bulls will now make another attempt to clear the overhead hurdle at $23. If they succeed, the DOT/USDT pair could start a new uptrend and the price could rally to the 200-day SMA ($29).

Alternatively, if the price turns down and breaks below the 20-day EMA, it will suggest that the bullish momentum may have weakened. That could pull the price down to $19 and if this level gives way, the next stop could be $16.

DOGE/USDT

Dogecoin (DOGE) turned down from $0.15 on March 28 and dropped to the moving averages. This is an important support for the buyers to defend if they want the bullish sentiment to remain intact.

DOGE/USDT daily chart. Source: TradingView

If the price rebounds off the current level with strength, the bulls will attempt to push the DOGE/USDT pair above $0.15. If they succeed, the pair could rally to the overhead resistance at $0.17. The marginally rising 20-day EMA ($0.13) and the RSI in the positive territory indicate a minor advantage to buyers.

This positive view will invalidate in the short term if bears sink and sustain the price below the moving averages. Such a move could open the doors for a possible drop to the critical support zone at $0.12 to $0.10.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

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Ethereum is like the best and worst parts of New York: Grayscale

Ethereum is like the best and worst parts of New York: Grayscale

“Ethereum is like New York City: it is vast, expensive, and congested in certain areas. However, it also features the richest application ecosystem,” Grayscale wrote.

Digital asset manager Grayscale has published a report on smart contract platforms in which it likens the Ethereum (ETH) blockchain to the best and worst parts of New York City.

The report examines the granddaddy smart contract network Ethereum in comparison to newer competing blockchains such as Solana (SOL), Avalanche (AVAX), Polkadot (DOT), Cardano (ADA) and Stellar (XLM). The report comes in the wake of the firm launching a crypto fund dedicated to smart contract platforms excluding Ethereum.

In a section titled “digital cities,” Grayscale analyzed Ethereum, Avalanche and Solana. The firm compared Ethereum to the Big Apple, noting that they both share similarities with issues that arise from their stature:

“Ethereum is like New York City: it is vast, expensive, and congested in certain areas. However, it also features the richest application ecosystem, with over 500 apps that command a total value of over $100 billion—more than 10x larger than any other competing network.”

“Users and developers take comfort that Ethereum will likely continue to be the center of gravity for application innovation and liquidity due to the size of its community and the amount of capital locked into the network’s smart contracts. An L2 solution like Polygon is comparable to a skyscraper in NYC: it scales by building upwards,” the report added.

The firm went on to suggest that users moving to competing blockchains is like moving to a cheaper city due to the high gas fees and network congestion on Ethereum caused by overwhelming demand for decentralized finance (DeFi) services and nonfungbile tokens (NFTs) over the past two years.

“As Ethereum fees began to eclipse $10 per transaction, smart contract platforms like Stellar, Algorand, Solana, and Avalanche experienced strong growth in daily on-chain transaction counts,” the report read.

Grayscale described Solana as like Los Angeles, noting that it is a “structurally distinct network that is speedier and focuses on different use cases” such as on-chain order books such as Mango Markets, which requires fast transaction speeds and low fees to operate.

“Solana’s architecture relies on a different consensus mechanism that prioritizes speed and lower fees though at the cost of more centralization — rather than scaling through L2 chains Solana runs transactions through a speedy L1 chain. Running roughly 2300 transactions per second as of March 15, 2022,” the report reads.

Avalanche was compared to Chicago in that its economy is similar to NYC, but has a smaller network, “transactions are cheaper and less congested, and development is more centralized.”

“Game-specific subnets like Crabada, and partnerships with firms like Deloitte should offer more differentiation compared to apps on other chains, helping Avalanche craft a distinct identity moving forward,” Grayscale wrote.

Related: Grayscale gears up for legal battle with SEC over Bitcoin ETF

Regardless of the comparisons, Grayscale emphasized the bullish use cases for smart contract platforms moving forward, with the firm pointing towards DeFi and the up and coming Metaverse sector in particular:

“The market opportunity for DeFi and Metaverse applications combined, in our opinion, is likely larger than the $2 trillion market cap of the entire digital assets market today.”

“Smart contract platforms are the operating layer that DeFi and Metaverse applications build on and leverage for transactions, ultimately driving value to the base chain as users accumulate native tokens for fees,” the report added.

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