Why did the SOL price break the $250 mark, and why could it potentially reach $500 next?
Recently, Solana's price surged to $250, setting a new high, but later it dropped back to around $230. This is quite interesting, so let's take a look at why it might rise to $500 next.
First of all, in the past 24 hours, Solana's trading volume skyrocketed to $11.99 billion, and the number of active addresses reached 6.07 million, which indicates what? The market enthusiasm is high!
From a technical perspective, a "cup and handle" pattern has appeared on the weekly chart, which is a good sign and traditionally indicates that the price will continue to rise. Based on this pattern, the target price might exceed $500! However, we also need to be rational; this prediction should be combined with market conditions and risk factors.
Currently, $200 is a direct support level, with $178 and $160 also serving as technical support levels. If the market retraces, these price levels might be the starting point for a rebound.
Moreover, the open interest has decreased by 7.57%, down to $5.18 billion, and leveraged positions have also decreased, which is good for market stability and can reduce the risk of chain liquidations.
The financing rate is still positive, hovering around 0.0130%, indicating that sentiment in the derivatives market is quite optimistic. Since mid-October, this indicator has been rising, and traders are quite bullish.
Major institutions are also optimistic about Sol, with a recent inflow of $1.75 million. The activities of these large shareholders have provided a lot of confidence to the market.
As for the price, it is currently fluctuating between $231.87 and $256.23, with some volatility, but this is normal when testing new price levels.
Network indicators also show that Sol's adoption rate is continuously increasing, with both transaction volume and active addresses hitting new highs. As usage rates rise, prices naturally follow, although short-term volatility still exists.
Market observers also say that the $250 price level is quite crucial, having acted as a resistance level during the previous bull market. Although it has only temporarily broken through now, it also indicates that market dynamics are changing.
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