Solana is a cryptocurrency that has proved its mettle in the tough crypto market this year. The SOL token has gained an impressive 100% since the start of Q1 2023, making it the top-performing cryptocurrency in the top25 list. The massive gains came on the back of improved investor sentiment towards the coin, post the FTX fiasco in 2022 that saw the value of the coin plummet 95%.

The January rally of around 140%, however, came without much noticeable fundamentals that could have driven it up. Possible factors that may have triggered the rally include the oversold condition the SOL/USD pair was in late December and the investor sentiment which was lifted after Messari's analysis of the Solana ecosystem that showed it was stable and actually made some improvements post the FTX issue.

Solana's run in the first quarter of 2023 was, however, short-lived as the prices slipped 40% from the January peak to reach around $20.8. Additionally, its market dominance (SOL.D) that was 0.98% in January dropped to 0.69% by March. That can be interpreted as traders transferring their capital to other volatile assets.

The short-term outlook for the SOL/USD however looks bullish as the prices have now converged at two technical support levels. A breakout from this support zone may see the prices rebound by at least 30% from its current rate of $20.8 up to the multi-month support/resistance flip level at around $26.50. However, if the coin price drops below both the support levels we might see it retest its March low of $16.



Other News from Today