Solana (SOL) Price Forecast: $120 Retest More Likely Than $90 Downswing

Key Insights:  

• Solana (SOL) price has sustained steady support above the $100 level following a week-long wave of bearish headwinds.

• SOL 24-hour Trading Volume dropped to a 14-day low of 1.8 billion on Dec 30, signaling that traders are looking to HODL rather than sell at the prevailing prices.

Technical Indicators suggest the bulls are still in the driving seat with SOL price still trading well above the 20-day SMA.

 

Solana (SOL) price closed 2023 on a positive note, holding firmly above the $100 support level amid a week-long wave of bearish headwinds in the layer-1 alts markets. A crucial on-chain metric reveals how traders’ activity in recent days could impact SOL price rebound prospects.

With Solana investors increasingly looking to HODL rather than sell at the current prices, is $120 a viable target?

 

Solana Trading Volume Drops to 14-day Low as Investors look to HODL 

When Solana’s price soared to a 19-month peak of $126 on Christmas day, it effectively sent 100% of investors who bought SOL in 2023 into profit positions. Since then how ever SOL price has retraced 19% from  $126 to $102 between Dec 25 and Jan 1.

But with majority of recent SOL buyers still holding sizable profits, on-chain data trends reveal that traders are looking to HODL rather than exit at current prices. 

As depicted below, Solana Trading Volume has dropped to  a 14-day low of $1.7 billion on Dec 31, a $1.45 billion over the past week, 76% lower than last week’s peak of $6.4 billion. And notably, this is the lowest SOL daily trading volume recorded since Dec 17. 

 

Trading Volume metric represents the dollar value of all SOL-denominated transactions executed within a daily time frame. It serves as a crucial indicator of market activity and investors’ disposition to the ongoing price trend.

A closer inquest into recent trends shows that while Solana price has only dropped by 19%, the  trading volume has dropped whopping 73% between Dec 25 and Jan 1. 

When trading volume declines during a price downtrend, but at a much faster pace as observed above, it is often a tell-tale signal that selling interest is diminishing. This the allignment in the Solana markets indicates growing exhaustion among the bears.

 

As the selling pressure wanes, this is likely to paving the way for a bullish Solana price reversal in the days ahead. 

SOL Price Forecast: Potential Upswing Toward $120 ? 

Drawing infrences from the prevailiing market dynamics analyzed above, a rebound toward $120 is a more likely outcome for Solana price in the week ahead. 

 

The Bollinger Bands technical indicator also confirms this outlook. It shows that despite the 19% price pullback to $102 at press time on Jan 1, SOL is still trading well-above the 20-day Simple Moving Average of $93.

This alignment means that on average, traders are still willing to pay about 10% more for SOL than they would have offered 20 days ago.

 

Hence, considering that the bulls are still largely dominant, SOL price could retest th $120 area once the consolidate phase is over. However, the $125 resistance at the upper bollinger band could form a major obstacle to the next rally. 

 

On the downside, the bears must breakdown the $93 support to gain control. Losing that vital support zone could effective send the bulls into panic mode.