Solana (SOL) Price Trend: Key Support Rebound and Long-Term Growth Signals

Recent Market Dynamics

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Solana recently rebounded from the key support level of $175, marking a reversal after a significant drop in early December. As of the time of writing, the price stabilized around $196, reflecting strong market resilience and support from capital inflows.

Technical Indicator Analysis

Moving Average (MA) Supports Upside

The price trend is supported by the 50-day moving average, which is above the 200-day moving average, forming a classic bullish signal known as the Golden Cross.

This indicator suggests that the long-term trend may remain upward, consistent with the recovery trend since September 2023.

MACD (Moving Average Convergence Divergence) Signals Short-Term Caution

The MACD line has crossed below the signal line, indicating a strengthening bearish momentum in the short term.

However, the MACD histogram is flattening, suggesting that selling pressure is easing, and a trend reversal may occur in the short term.

High Trading Volume Maintained

In recent price fluctuations, trading volume has significantly increased, especially during the decline. This indicates active market participation, with both retail and institutional investors increasing their positions.

Capital Inflows and Investor Confidence

Sustained Capital Inflows Support Prices

According to Glassnode data, Solana has consistently maintained a positive net realized profit/loss, with realized profits significantly exceeding losses.

Capital inflows have steadily increased since the beginning of 2023, helping SOL climb from below $20 to nearly $200.

Daily Inflows Surge

Daily capital inflows once reached $776 million, reflecting strong bullish sentiment towards Solana in the market.

The shift from long-term capital outflows to current positive capital inflow patterns lays the foundation for Solana's price stability and long-term growth.

Balance of Profit-Taking and Capital Inflows

While some capital outflows reflect natural profit-taking, overall inflow volume holds an overwhelming advantage, further strengthening investor confidence.

Market Outlook and Investment Strategy

Short-Term Caution

Given that MACD signals indicate a short-term bearish trend, investors should closely monitor MACD reversals and price performance at key support levels.

Long-Term Bullish

Sustained capital inflows and strong technical indicators provide a solid foundation for Solana's long-term growth, with its price expected to maintain stable growth over the coming months.

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