Solana native token SOL has been on a tear since the start of the year. But the token might be on its way to test its support as it faces rejection.
Recent on-chain developments contributed to Solana’s climb. But with the rejection, can SOL regain its bullishness?
Solana Keeps Things Aglow
The Solana ecosystem is touted as an “Ethereum killer” as it rose in prominence due to its low transaction fees and its capability to go through thousands of transactions per second.
Sam Bankman-Fried, former CEO of the now-defunct crypto exchange FTX, called the ecosystem “underrated” last year.
This connection with SBF and FTX led to both the ecosystem and the token to take a plunge, losing nearly half of its value.
SOL total market cap at $7.6 billion on the daily chart | Chart: TradingView.com
Because of this, the team behind the network made efforts to distance itself from FTX and Bankman-Fried.
The Messari overview which was commissioned by the Solana Foundation, detailed how things went down with regards the crypto exchange and its former big boss.
Image: BONK/Twitter
But during the turn of the year, SOL and other altcoins started rallying as major cryptocurrencies like Bitcoin and Ether broke through crucial resistances.
And with the release of BONK during the rally, the network usage of SOL shot upwards, adding on to the already solid trajectory that SOL has.
Source: Alchemy
Despite the fear, uncertainty, and doubt that plagued the ecosystem, Solana is still considered as a fast growing ecosystem, according to a recent report, which shows that the development on the network is increasing compared to its competitors.
1/ A new report by @ElectricCapital shows that Solana is the fastest growing developer ecosystem, surpassing 2,000 total developers in 2022. It’s second in raw numbers only to Ethereum.
Let’s dig into the numbers.https://t.co/HQvPbQzQD2 pic.twitter.com/xV6pnoT7db
— Solana (@solana) January 17, 2023
This certainly had an effect on SOL’s price. At the time of writing, SOL is trading at $20.63, up 30% in the last seven days.
Rejection Line And What It Means
Meanwhile, the token was rejected at $25, which could mean that bears will be able to test the two support levels that helped SOL reach its peak price. In the next few days, SOL is seen retesting the $18 and $16 supports.
Chart: TradingView.com
SOL’s bullish pace in the weekly timeframe would certainly have an effect on the token’s ability to recover from the rejection.
Although it is highly likely that the $18 support will break, investors and traders can rely on $16 as a launching pad to retest $25 in the coming days or weeks.
If $25 is broken, $30 should be the next target as a breakthrough in this area would give SOL bulls legroom for more upward movement.
SOL can rely on a solid ecosystem and a bullish community to recover lost ground.
Featured image by Sunshine Adult Day Care