Solana (SOL) has had a slightly disappointing month despite its strong yearly earnings, and its recent decline could be partly attributed to the temporary weakness of the meme coin sector, which is the main source of activity on this layer-one blockchain, as some took profits following the post-election bull run. Similar to the performance of major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP), the price of SOL, the native token of the Solana blockchain, has fallen by 15.3% in the last 30 days.
Despite the frustration caused by the recent price action, there are some indications that this temporary pullback could pave the way for an upward breakout of the $300 area in the coming weeks, as analysts see the recent decline forming a technical pattern known as a “bullish pennant” which often turns into an uptrend and paves the way for a strong jump that could repeat or surpass the previous uptrend.
It is worth noting that the price of SOL rose by 54% from November 5 to November 23. Therefore, if the bullish flag pattern triggers a similar move, the price could rise to $300 or higher, a significant psychological and financial level that would make Solana the fourth largest cryptocurrency by market cap, surpassing Ripple (XRP). According to technical analysis studies, 70% of bullish flag patterns succeed in creating an upward wave, especially on daily charts like the one used in this analysis. Also, statistics indicate that the target price - $300 here - is reached in about 60% of cases when this pattern is formed.
⭕It should be noted that these estimates are not 100% reliable, and cannot be considered investment advice or a trading strategy, but they reflect what happened previously.
In the same vein, the Fed’s decision to cut interest rates by another 25 basis points could have an impact on this positive move for Solana, as investors’ confidence in the financial situation increases, as increased liquidity in the market usually has a positive impact on the price of riskier assets such as cryptocurrencies. Accordingly, the Fed’s decision could be a positive catalyst for SOL’s price in the near term. Furthermore, crypto traders are bracing for another event that will positively impact the market, which is the “Christmas bull run,” which usually occurs in the week following Christmas and lasts until January 2. In any case, this combination of positive technical moves and favorable macroeconomic factors seems to favor the price of the Solana blockchain’s main coin to break its current highs before the end of the year.