The digital asset market has been rife with volatility over the past few weeks, and Solana (SOL) has not been an exception. While its price has seen a recent pullback, some indicators suggest that SOL might be gearing up for a potential bullish cycle. The article presents a thorough review of the topic from NordaLueur‘s brokers.
SOL’s Recovery and Market Sentiment
Solana’s price rebounded from a session low of $96 to close near $107, highlighting some resilience. This upward movement was further bolstered by global news, particularly the decision to halt the implementation of higher tariffs on several countries, which boosted the price to $119.
Despite this positive move, SOL experienced a 4% retreat today as the market shifts its focus to the U.S. inflation report for March.
The inflation rate came in at 2.4%, which was 20 basis points below the analysts’ consensus estimate. Under normal conditions, such an underperformance would likely lead to a crypto market rally. However, the looming tariffs are a dark cloud hanging over the market, preventing broader enthusiasm. This uncertainty continues to suppress investor sentiment.
FART Coin Drives DEX Trading Volumes Higher
A significant catalyst for the recent uptick in Solana’s decentralized finance (DeFi) activity has been the surge in FART, a Solana-based meme coin. FART has taken the market by surprise with its price nearly doubling in the past week while many other digital assets have faced steep declines.
Trading volumes for FART in the past 24 hours have increased by 56%, reaching nearly $432 million. Notably, Solana-based DEXs like Orca and Raydium have captured a large portion of these volumes through the FART/SOL pair.
The price action in meme coins often triggers a broader speculative frenzy, and this momentum could potentially spill over into other Solana-based assets, including SOL itself.
The increase in trading volumes on Solana DEXs has been substantial, with the first 9 days of the month showing a 23.5% increase over March’s volumes. This uptick suggests that the market could be starting to reverse its downtrend, especially if meme coins like FART continue to rally.
Solana’s Price Action and Technical Indicators
Turning to Solana’s price chart, SOL bounced off a key support level this week, providing some hope for a bullish recovery. Momentum indicators have shown slight improvement, further adding to the optimism.
The Relative Strength Index (RSI) recently crossed above its signal line, sending a buy signal, while the MACD’s histogram shows that negative momentum has decelerated.
Despite these positive signals, SOL is still firmly entrenched in a downtrend until a stronger reversal is confirmed. The chart features a descending triangle, a bearish price pattern that signals selling pressure at any price above the support level. As SOL continues to approach this support, there is a risk of further downward pressure, especially if the broader market remains pessimistic.
If SOL breaks below the $100 support, it could face a 22% decline, targeting the $78 area. If global trade tensions worsen, this could push the price even lower, potentially as low as $70.
Trading volumes around the $100 level have been relatively high, signaling a significant buildup of buy orders at this critical juncture. If sellers manage to break this level again, the market’s buying power could already be exhausted, favoring a bearish breakout.
Bullish Short-Term Outlook
Despite the ongoing downtrend, SOL’s price action remains somewhat constructive in the short term. A break above the ceiling of the ascending triangle on smaller timeframes would indicate a shift in momentum, but this is still contingent on broader market conditions.
For now, SOL’s ascending triangle ceiling has turned into a support floor. If this floor holds, it could provide a base for a bullish reversal.
Even with the current pullback, the price action remains within the typical Fibonacci retracement levels. As long as the 61.8% retracement level holds, a short-term bullish outlook remains intact.
A decline to the next Fibonacci level could trigger another attempt to push the price higher, especially if broader market conditions improve, such as an easing of trade tensions or better-than-expected macroeconomic data.
Conclusion: Is a Bullish Cycle Beginning?
Solana’s technical setup presents a cautiously optimistic view for the near future. While the $100 support area remains critical and the broader macroeconomic backdrop remains fragile, the improvement in trading volumes and the momentum indicators suggest that a bullish cycle could be starting. The FART coin’s success is an indicator of Solana’s potential, and its DeFi ecosystem could see a resurgence if more Solana-based tokens gain attention.
COMTEX_465113110/2922/2025-05-01T12:15:17
