Does Solana’s token SOL have a bullish case after recent gains?
Solana’s SOL has recovered from the bottom of $32.
Solana is touted as an Ethereum killer, but frequent network issues are a concern.
Price is yet to find lasting bullish momentum as resistance at $42 keeps it lower.
As most cryptocurrencies trade at multi-year lows, price bottoms are perfect buying opportunities. Solana SOL/USD, one of the booming cryptos in 2021, trades at $32. The price is significantly below its all-time highs of above $250. The cryptocurrency traded at $42 some days ago, a significant jump from the lows of $26. Now, SOL seems to have been trapped below a resistance at $42.
To see a lasting recovery in price, SOL needs to break above $42. Although the price seems to have broken above the downtrend, SOL remains bearish. The bear weakness in SOL emanates from the general market and the network’s shortcomings.
Solana is often touted as Ethereum’s killer. The labeling comes from its similarities to Ethereum while offering a more scalable ecosystem. The ecosystem also offers faster and less expensive transactions compared to Ethereum. The prior year’s gains underlined the trust that Solana had built in the blockchain industry. However, several hacks and network outages have accelerated SOL’s market weakness. Besides the sector weakness, Solana needs to address network issues to compete with Ethereum.
SOL technical analysis shows waning bullish momentum
Source – TradingView
On the shorter 4-hour time frame, SOL is under pressure after failing to break past $42. The weakness underlines the lack of directional move for the token. An RSI of 25 suggests the token is currently oversold. However, there is still room to move lower as the next support stands at $26. As long as the bear crypto market continues, SOL will remain trapped below $42. We cannot rule out a break below the $26 support.
Solana’s SOL is bearish. The token failed to break past $42 and is going lower. The next level to watch is $26, but the price can break lower.