Solana(SOL) Surges to New High in 2023, Will It Continue to Rise in the Future?

As of the time of writing, the trading price of Solana (SOL) token has reached a new high in 2023, standing at $36.35, amid a broader market uptrend led by Bitcoin (BTC).

One significant factor contributing to this surge is the Solana Breakpoint conference. From October 30th to November 3rd, builders of the Solana ecosystem gathered in Amsterdam, Netherlands for the community's annual celebration. The event boasted a substantial lineup of guests, including cryptocurrency executives, developers, artists, content creators, policymakers (both non-profit organizations and government), and students.

Topics of interest discussed at the event may include FTX and Alameda Research, which have announced plans to sell up to $60 million worth of Ethereum, Solana, and other assets. In another report, the exchange FTX transferred approximately 469,587 SOL tokens worth around $15.2 million to Binance and Coinbase exchanges.

In fact, with traders actively promoting the Solana Breakpoint conference, trading activity in the SOL market has increased significantly by 150%.

Over the past 24 hours, the price of Solana has surged by nearly 12%, potentially extending to the psychological level of $40.00, which would represent a 10% increase from current levels. Importantly, technical indicators indicate that SOL's upside potential has not yet been exhausted.

The Relative Strength Index (RSI) being above the 70 level indicates that SOL is in a heavily overbought state. However, considering that the momentum indicator is still trending upwards, it does not guarantee selling pressure. The Awesome Oscillator (AO) also suggests a bullish sentiment, moving within the positive region and showing significant histogram bars.

SOL/USDT 1-day chart, source: TradingView.

Furthermore, data from Santiment confirms the bullish expectations, indicating a significant increase in SOL's volatility, social dominance, and open interest contracts. In summary, these indicators suggest that investors anticipate a strong upward trend in Solana's price, indicating a higher likelihood of an increase.

SOL volatility, open interest contracts, and other data, source: Santiment.

On the other hand, after experiencing a sustained uptrend, traders who bought SOL multiple times at $30.10 or lower may start selling. This implies that the ensuing selling pressure could lead to a retracement in Solana's price towards the mentioned levels or even breaking below the support at $28.00.

SOL price chart (August 2022 - October 2023), source: TradingView.

In a more pessimistic scenario, the price of Solana could decline to the order zone representing the bullish breakout point, falling from $27.46 to $26.33. If it steadily drops below the midline of that zone at $26.87, the support will be cleared, potentially causing SOL to drop to the psychological level of $20.00, resulting in a decline of approximately 40% from current levels.