Last month, Solana (SOL) and various other cryptocurrencies faced a wave of selling pressure following the Securities and Exchange Commission’s (SEC) lawsuits against major exchanges Binance and Coinbase.
However, Solana has defied the odds and made an extraordinary comeback in recent weeks. Demonstrating resilience and strength, Solana has emerged as one of the top-performing digital assets during this period of recovery.
Solana price analysis
At press time on July 13, SOL was changing hands at $21.84, down 0.62% in the past 24 hours.
Over the past 7 days, though, the crypto token rose more than 10%, making it the second-best performing crypto token on weekly charts after Compound (COMP).
Solana’s monthly rally is even more impressive, with the cryptocurrency soaring more than 40% and adding over $1.8 billion in market cap over that period.
Year-to-date, SOL capitalized on the broader market rebound alongside other digital assets, surging around 120%.
Why is Solana surging?
Solana’s remarkable rebound comes amid pronounced bulls’ activity over the past 3 weeks, propelling the cryptocurrency out of a descending channel, as highlighted by popular market analyst Captain Faibik.
This suggests that the price has moved above the downward trendline that was previously holding it back. A breakout such as this one suggests a potential shift in momentum, indicating that the SOL’s price might start moving upwards instead of continuing its previous downward trend.
On the downside, increased bullish activity also adds to the probability of sell pressure as some technical indicators such as the relative strength index (RSI) and money flow index (MFI) already imply that SOL is being overbought.
Why did Solana struggle last month?
Being one of the biggest altcoins, Solana saw its price crash significantly last month after a number of trading platforms such as Robinhood and eToro delisted the token.
The reason behind this was the SEC’s lawsuit against Binance and Coinbase, in which the regulator alleged that SOL is unregistered security.
Several other cryptocurrencies are also seen as unregistered securities in the eyes of the SEC, including Polygon (MATIC), Cardano (ADA), Sandbox (SAND), Flow (FLOW), and dozens more.
While Solana’s remarkable performance may persist, it would not be unexpected to witness a correction in the near future, favoring the bears. This anticipation is supported by overbought signals on key indicators such as RSI and MFI.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
