Solana (SOL) has been one of the leading cryptocurrencies in this bull market, rising 66.8% over the past three months to reach its latest all-time high (ATH), surpassing its competitors.
Despite its significant rise, SOL has recently shifted focus to altcoins like XRP, which may face substantial correction risks in the coming days.
Will Solana retest $200?
Solana has outperformed most of the market in this cycle, with an increase of over 231% last year. Its ecosystem has been a hot topic, with meme coins based on Solana leading market narratives, and SOL's decentralized finance (DeFi) activity surpassing that of Ethereum.
Less than a month ago, during the bullish momentum of cryptocurrencies, this altcoin surpassed Binance Coin (BNB) to become the fourth-largest token by market cap. The price of SOL rose to near the $200 range, bringing its market cap to $88 billion on November 6.
Since then, its market cap has surged nearly 20% to $105 billion, but the momentum for SOL has begun to slow as other cryptocurrencies rise. On Sunday, XRP surpassed Solana and Tether (USDT) to become the third-largest cryptocurrency by market cap, dropping SOL to fifth place.
This milestone for XRP has raised concerns among some investors and market observers about SOL's future performance, as the cryptocurrency has corrected 14% from its latest all-time high of $263 set nine days ago.
Cryptocurrency analyst Income Sharks pointed out that Solana shows a bearish structure on its lower time frame charts. According to the post, after a diagonal trend line was broken over three weeks, the altcoin formed a head and shoulders (H&S) pattern over the past month, indicating a trend reversal for Solana.
On Sunday night, SOL broke below the $230 mark, reaching its lowest price since November 15, and fell below the neckline of this pattern. This could lead to a correction of about 10% for Solana, testing its previous support area in the $200 - $210 range.
Similarly, cryptocurrency analyst CRG pointed out that it is possible to retest these levels before rebounding to new highs.
Solana achieved a historic closing price in November.
Despite recent pullbacks, some cryptocurrency observers believe that SOL's upward momentum is far from over, emphasizing the token's strength throughout the cycle and its achievements. Crypto Jelle noted that after breaking out of an 8-month bull market triangle pattern in November and "locking in a monthly breakout," Solana still targets $400 - $600 in its price discovery phase.
Similarly, Rekt Capital noted that this cryptocurrency recorded a historic closing price in November, witnessing "the highest monthly closing price ever." Other analysts echoed this sentiment, suggesting that investors should remain optimistic about the $400 target due to the continued strength in momentum.
Additionally, Solana presents a multi-year cup and handle pattern, with potential gains of 100% to a target of $400 after breaking out from the handle trend line last month. SOL recorded declines of 5.3% and 7.2% on daily and weekly time frames, respectively, but has risen 36.3% over the past month.
At the time of writing, Solana is trading at $224, with its daily trading volume increasing by 97%.
