SOL Shows Recovery Signs: 7.5% Gain After 27% Weekend Plunge

As much of the cryptocurrency market faces downturns, Solana is showing signs of recovery from a significant correction. The digital currency has risen 7.5% in the past 24 hours, rebouncing from a three-week low, prompting some analysts to speculate that the worst might be over.

Over the past weekend, Solana experienced a 27% drop from Friday's peak, falling to a three-week low of $175. This decline coincided with a broader market sell-off, which was largely influenced by geopolitical developments. On February 1, then-President Donald Trump introduced new tariffs on imports from Canada, Mexico, and China.

These tariffs led to retaliatory measures from the affected countries, sparking fears of a global trade war. Consequently, major cryptocurrencies like Bitcoin and Ethereum suffered severe price drops, hitting $91,200 and $2,100 respectively. The market saw at least $2.3 billion in liquidations, though some estimates suggest the figure could be much higher.

Solana fell below the crucial $200 support level, reaching new lows under $180. With market instability, some analysts, such as Ali Martinez, warned of further potential declines, suggesting Solana might face a retracement to $138 if it failed to maintain the $191 support from its ascending channel.

Crypto trader Bluntz expressed concern over losing the $220 support, comparing it to a past bearish divergence and suggesting that significant recovery might require extraordinary developments.

Despite slipping past essential thresholds, Solana retested support between $170 and $180, rebounding from the $175 mark and attempting to break the $200 resistance soon after. Crypto analyst Jelle remarked on Solana's ability to retrace gains from the so-called TRUMP memecoin rally, allowing it to reclaim the $220 resistance and achieve an all-time high of $295.

Jelle further noted that Solana's structural integrity remained intact despite recent declines, highlighting the cryptocurrency's robust chart pattern during its recovery. Amongst market turmoil, Solana demonstrated resilience, maintaining its position alongside Bitcoin by holding key horizontal levels within its price range post-U.S. elections.

Martinez noted that “in the midst of this volatility, the TD Sequential indicator signals a buy for Solana on the daily chart.” Miles Deutscher pointed out that both Bitcoin and Solana's prices have exceeded levels seen prior to recent liquidations, reflecting the market's ongoing volatility. Solana, together with Bitcoin and XRP, stands as one of the few top 10 cryptocurrencies exhibiting positive performance. Jelle suggests that if Solana can close above the monthly and weekly support levels around $200 to $210, it may continue its positive trajectory, aiming for a retest of the $240 resistance and potentially push towards $300.

As of now, Solana is trading at $211, marking a 7.5% daily increase.

Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.