Solana prices are showing positive signs of recovery, rising 6% on Friday to near the $126 level. This rally follows an alarming decline below the key $120 level, raising concerns about a downtrend that could drag the cryptocurrency towards the $100 threshold.
Solana price rises
Motley Fool analyst Chris McDonald recently highlighted two key factors contributing to Solana’s resurgence. One important catalyst has been the proactive efforts of the Solana Foundation.
Bitcoinist reported earlier this week that the organization is currently evaluating whether its network can withstand potential threats from quantum computing technology.
The Solana team collaborated with Project Eleven, a security firm specializing in post-quantum cryptography, to launch a quantum-resistant testnet after conducting a comprehensive threat assessment.
The second notable factor driving Solana’s price increase was the announcement by health and wellness company Mangoceuticals that it plans to allocate $100 million to acquire and hold SOL.
Despite the positive momentum, experts warn that Solana’s price is currently following a “clean adjustment structure.”
Moving average suggests a downtrend
From a technical analysis perspective, the 50-day simple moving average (SMA) is sitting at around $143, which is significantly higher than the current trading range, while the 200-day SMA is even closer to around $170, suggesting an extended downtrend rather than a healthy consolidation.
In the short term, the 20-day exponential moving average has also rolled over around $133, consistently rejecting previous attempts at a pullback.
Analysts note that any pullback will likely be seen simply as a counter-trend move until Solana prices close above the low $130s for an extended period of time.
Immediate support lies just below the current trading level of $125, followed by key levels in the $121 to $120 range and another demand zone around $110.
As NewsBTC reported on Thursday, a deeper economic downturn could push the price into the high $90s, with some predicting it could fall to around $80 if liquidations accelerate further.
The market has already hit an eight-month low around $116.9. A definitive close below this level could push Solana price towards the psychologically important $100 level.
On the upside, Solana price may encounter initial resistance concentrated in the range of $133 to $138, with stronger resistance observed at higher levels between $144 and $147, which could preclude a renewed recovery in the near term.
To foster further price recovery, Solana price will need to clear the second group resistance level at the daily close, ideally supported by increased trading volume, paving the way for prices between $160 and $165.
Featured image from DALL-E, chart from TradingView.com
