- Solana (SOL) recently surged to $145, driven by bullish market sentiment and increased FOMO, but caution is advised as indicators suggest a potential price correction.
- While further gains are possible, investors should monitor market signals closely to manage their portfolios effectively.
Solana (SOL) investors have had plenty to celebrate recently. After enduring a bearish spell, the token’s fortunes turned as both its weekly and daily charts glowed green. In the past week, Solana’s price surged by more than 9%, with a notable 4% increase in just the last 24 hours, propelling its value to $145. However, this bullish momentum might be short-lived, and caution is advised.
The FOMO Effect
CoinMarketCap data revealed that Solana’s recent rally pushed its market capitalization above $67 billion. This surge also triggered a spike in market sentiment, turning it bullish. Yet, a tweet from Santiment shed light on a potentially troubling development: the rise of FOMO (Fear of Missing Out). Historically, increased FOMO during a price surge often signals an imminent end to the bull run.
Interestingly, Avalanche (AVAX) has also experienced a bullish rally without a corresponding rise in FOMO, highlighting a different market reaction compared to Solana.
Will Solana’s Bull Rally Last?
To gauge the sustainability of SOL’s bull rally, AMBCrypto analyzed its on-chain data. According to Coinglass, SOL’s long/short ratio has increased, a positive sign indicating high bullish sentiment around the asset. However, Solana’s fear and greed index, currently at 63%, suggests the market is in a “greed” phase, a level often preceding a price correction.
Additionally, the Bollinger Bands indicated that SOL’s price was entering a less volatile zone. The Relative Strength Index (RSI) showed a decline after a sharp rise, suggesting a potential price drop. On the other hand, the Chaikin Money Flow (CMF) remained upward, and the MACD displayed a bullish crossover, hinting at continued price growth.
Our analysis of Hyblock Capital’s data supports the possibility of further gains. If the bull rally persists, Solana could break the $150 mark in the coming days. However, with the current market sentiment and technical indicators, investors should remain cautious and monitor these signals closely.
Solana’s recent performance has been impressive, but the warning signs of a possible price correction cannot be ignored. The rise in FOMO and the market’s greed phase are critical factors to watch. While the potential for further gains exists, prudent investors should be prepared for a possible pullback and manage their portfolios accordingly.
