Is it time to buy Solana?
With Solana's price up over 14% today and currently sitting at $11.30 as of the time of this writing, "Is it time to buy Solana?" I will share my perspective with you, but please note this is not investment advice. Consider this educational content and before making any final decisions, do your own research. I like to look at both the fundamentals and technical side when analyzing the price movement. So let's dig in!
Solana Explodes to the upside
You can clearly see in the 15 minute chart, where the price exploded around 7 AM UTC time. I’ve seen news sources attribute this to a new community airdropped meme token called Bonk. It’s a dog coin. You can find more information about it on their site https://www.bonkcoin.com/ but the key takeaway is that 50% of the supply was airdropped to NFT holders, early openbook traders, and various artists, collectors, and developers. The supply is huge sitting around 100 trillion tokens. I think it’s too early to tell if Bonk could end up having success similar to Shiba Inu. Post in the comments below if you would like me to do a further analysis on Bonk.
So where is Solana going pricewise now?
First, a little background on the current price. Since November 2021, Solana has gone down over 95%. It was also hit hard by the collapse of FTX. Losing around 60% of the value then. From a fundamental perspective, I think the chain still looks great, it has fast transactions, it is cheap, and if you missed getting in under $20 in 2021, this is a great opportunity. Some may not recognize the value but when the bull market returns, I expect Solana’s price to go up as people look for alternatives to high blockchain gas fees and to escape the congestion on other chains.
On the technical side, considering how far the price has dropped, I’ve been expecting a rebound and a trading signal on the daily chart. You can see in the daily chart below that the Parabolic SAR indicator (I use a .01 increment setting) has generated a buy signal.
Some say it is best to have a second confirmation before jumping in on any signal. I think the clue we are looking for to make a decision is in the first chart I showed you, the 15 minute chart. We could be looking at a false breakout because of the Bonk token, so I would wait for the price to go above $12 before I would buy. This would establish a new extreme point for an uptrend and confirm that the direction is up.
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