- DeFi platform Solana‘s native token SOL defied the bearish Head and Shoulder formation and gained 13%.
- Solana’s decentalized exchanges Raydium and Serum added $3.5 billion to the blockchain’s TVL.
YEREVAN (CoinChapter.com) – Amid Solana’s growing ecosystem, SOL put on 13% since Oct 30 and traded close to its new all-time high of $219. The digital asset dismissed the warning signals from a technical formation dubbed the ‘Head and Shoulders’ (H&S).
The bearish pattern consists of three consecutive tops, with the middle one higher than the other two. A mutual starting line, dubbed the ‘neckline,’ connects the head and the two shoulder bases. H&S predicts losses equal to the distance between the head and the neckline. Thus, it could have brought SOL down 17% to $153.
Instead, Solana bulls doubled down and pumped the price to $205 on Nov 1, after the digital asset exhausted the pattern. Additionally, the relative strength index (RSI; purple graph at the bottom) recovered to 60.
In detail, RSI is a momentum indicator that reflects the traders’ perception of an asset. For example, a score between 50 and 70 could signify high confidence in SOL and willingness to invest.
It is noteworthy that SOL has gained 13,168% year-to-date. Some experts see it going higher in the upcoming sessions. The analyst behind the Twitter-handle Crypto Rand targeted the price at $300, citing several Pennant formations on the daily chart.
In detail, a bullish Pennant forms after an uptrend and features two converging trendlines with a similar slope that reduce the price swing as the pattern progress. The formation predicts a bullish streak equal to the preceding uptrend (flagpole).
What pumped Solana?
Sources report that SOL positively responded to the success of several protocols launching on Solana. For example, decentralized exchanges (DEXs) Raydium and Serum provide liquidity pools for cross-chain asset swapping. Furthermore, both platforms offer on-chain order books based on the Solana blockchain, in addition to yield curves.
As a result of the growing ecosystem, Solana’s TVL (total value locked) reached a record high of $13.7 billion before the altcoin market cool-off sent it down 8%. Raydium and Serum rank #1 and #2 in Solana’s protocol list, with TVLs at $1.87 and $1.64 billion, respectively.
Moreover, the NFTs (non-fungible tokens) are heating up on Solana. Crypto exchange FTX has recently launched an NFT marketplace that expanded support to the blockchain, meaning a part of NFT is minted on Solana, and users can purchase them with SOL tokens only.
In total, the Solana blockchain is home to over 400 native projects. Additionally, a few projects created on other platforms are migrating to Solana, like Audius, a Spotify competitor initially built on an Ethereum sidechain.