Solana is trading at $225 after a 12% decline in 24 hours.
Ali Martinez predicts a 20% price breakout for the token.
Technical indicators highlight mixed signals, with short-term volatility but potential for a bullish recovery.
Solana has fallen below its key support level of $232, trading at around $225 as of January 27, marking a 12% decline in the past 24 hours. The cryptocurrency’s market capitalization now stands at $109.85 billion, while its 24-hour trading volume has surged by 75% to $7.49 billion. This sharp increase in trading activity reflects a mix of dip-buying by optimistic investors and panic selling amidst market uncertainty.
The dip follows a period of relative stability for SOL, which had been hovering near the $255 resistance level in the past week. However, technical analysts believe that Solana may be on the brink of a price reversal. Crypto expert Ali Martinez recently that a 20% price breakout could occur if SOL maintains an hourly close outside the $251-$262 range — a condition that has already been met.
Technical Indicators
Meanwhile, the Moving Average Convergence Divergence (MACD) indicator is nearing a bullish crossover, with the MACD line (blue) approaching the signal line (red). Historically, this has been a reliable indicator of upward momentum, signaling a potential buy opportunity for traders.
However, the Accumulation/Distribution (A/D) line on the daily chart has started to decline, pointing to a bearish trend. A falling A/D line suggests that more investors are selling than accumulating, adding downward pressure to the token’s price. Moreover, the Relative Strength Index (RSI) shows a sharp downward gradient while holding at a neutral value of 50. This also signals a potential shift in momentum toward bearish territory.
These conflicting indicators suggest that while Solana may face short-term volatility, a rebound remains possible if bullish signals solidify.
Source: TradingView
What’s Ahead for Solana?
Solana’s long-term outlook remains promising, buoyed by potential market catalysts. Notably, Bloomberg recently reported that Elon Musk is exploring blockchain applications for government efficiency initiatives, including tracking expenditures. Analysts, including Ali Martinez, that Solana could emerge as a preferred blockchain for such use cases, potentially triggering a significant price rally if realized.
Further optimism surrounds the pending applications from prominent firms such as Grayscale, VanEck, 21Shares, and Bitwise. The approval of a Solana ETF in the US is widely expected to attract institutional investment, boosting the token’s price over time.
While Solana remains 23% below its all-time high of $294, achieved on January 19, analysts urge investors to focus on the token’s long-term growth potential.
