Solana (SOL) broke through the psychological $200 barrier on Jan. 2. Amid this rally, the Pump.fun platform has been moving substantial volumes of SOL tokens to Kraken.
While exchange inflows often signal bearish sentiment due to potential selling pressure, recent bullish momentum remains strong, bucking these typical trends.
Solana Sees Renewed Bullish Momentum After Large Deposits
Pump.fun made two significant deposits to Kraken on Jan. 1, according to Solscan data. The first transfer, valued at $22.8 million in SOL, was followed by a second deposit of $32.7 million. Additionally, on-chain data reveals that on Jan. 2, the Solana-based platform designed for the easy creation and trading of memecoins deposited 63,171 SOL ($13.11 million) to Kraken.
Typically, an increase in inflows of an asset to exchanges is a bearish sign and often a precursor to a price drop. However, SOL has seen an increase in demand to absorb this increase in supply. Thus, since January 1, its price has maintained an upward trend.
In fact, during the trading session on January 2, the altcoin broke above a descending parallel channel, which it had been trading in since November 23. This channel is made up of two parallel trendlines formed when the price of an asset is in a downtrend.
Solana Descending Parallel Channel. Source: TradingView
When an asset's price breaks above the upper boundary of the channel, it signals a potential reversal to bullish momentum, suggesting that the asset may experience a price bounce.
Furthermore, SOL broke above its 20-day Exponential Moving Average (EMA), confirming the increase in demand for the altcoin.
Solana 20-Day EMA. Source: TradingView
When an asset's price breaks above the 20-day EMA, it indicates a shift towards bullish momentum, pointing to a potential uptrend as market sentiment becomes increasingly positive.
Price prediction
On the daily chart, readings from the MACD indicator support this bullish outlook. Currently, the coin’s MACD line (blue) is above its signal line (orange). For context, this bullish crossover occurred on January 1, when Pump.fun began depositing coins to Kraken.
When an asset’s MACD indicator is set this way, it indicates bullish momentum. This means that the asset’s price may continue to rise as the short-term price action is stronger than the long-term trend.
Solana Price Analysis. Source: TradingView
If this holds, the price could break above the resistance at $219.31 and reclaim its all-time high of $264.63. On the other hand, a surge in selling will invalidate this bullish outlook, halting the current rally. In this case, the SOL price could drop to $189.24.
The article Can Solana (SOL) Hold Above $200? Analysis Answers appeared first on BeInCrypto.
