Alvaro Forbidussi, Venezuelan trader and energy market analyst for World Energy Trade and Banking and Businesshas shared with Cointelegraph en Español his analysis of Solana, in his opinion one of the fastest and most volatile cryptocurrency projects in the history of the crypto market.
In November 2021, the price of Solana (SOL) had skyrocketed as high as $260 per token, before falling as low as $8.00 after the FTX exchange collapsed.
However, Bitcoin, Ethereum and large cryptocurrencies such as Solana have skyrocketed since the beginning of 2023, for Forbidussi this has been a clear respite that has led the SOL price to even touch the USD 25 level in this “hit ” market.
Solana also has her flaws
According to Forbidussi, one of Solana’s greatest strengths is its high speed and low cost per transaction, around $0.00025, which is very low compared to the transaction fees Ethereum currently offers.
However, he points out that Solana is not a perfect cryptocurrency. ANDhe excessive focus on speed and efficiency makes this blockchain network more vulnerable to security issues and technical errors than slower, more stable systems like Ethereum or Bitcoin.
“The enormous speed of transactions also carries other costs. Novice developers may find it difficult to work with Solana’s complex consensus mechanism. In addition, this cryptocurrency network is much newer than the Ethereum competition, which gives the former an advantage that will not be easy to eliminate”explained Forbidussi.
“And then there is the black swan of FTX. At the end of 2022 it was discovered that the Solana Foundation was financially linked to FTX and Alameda Research and this, as a consequence, led it to lose 60% of its market capitalization. In addition, this cryptocurrency is much newer than the Ethereum competition, which gives ETH an advantage that will not be easy to eliminate”he added.
On the other hand, Forbidussi has mentioned other negative and positive points that the network has been registering even as a brand, these are: the slowdown in the production of blocks on February 25 after a validator software update, and also the closure of Solana Spaces, two stores that opened this summer in New York and Miami, but will close these weeks since the project attracted fewer expected people.
“However, more positive news for Solana came later, as the Helium Network announced that it would be migrating to the Solana network on March 28. So it’s not all that bad.”said.
Solana Technical Analysis
Regarding trading, Forbidussi highlighted that the idea of trading was to move with the price, and in this sense, he made a brief analysis of the graph considering two indicators (moving averages, bollinger bands) to estimate his prediction on the cryptocurrency price. SUN.
According to Forbidussi, in the weekly graph of SOL, so far the weekly closes of the SOL/USDT pair have remained above the 21-day Moving Average (MA21), and in his opinion this could indicate that Solana is in a long-term structural bullish trend.
Fig 1. SOL/USDT weekly chart. Source: Binance/TradingView.
For his part, on the daily chart of SOL/USDT -Alvaro explained-, the trend is still considered bearish. “The key is in the 50-day Exponential Moving Average (EMA50), because if it manages to position itself above the EMA200, market sentiment is bullish. To this day that elemental crossing is still quite far away. However, the EMA200 seems to have bottomed out after a long downtrend since May 2022.”he detailed.
Fig 2. SOL/USDT daily chart. Source: Binance/TradingView.
Regarding Bollinger Bands, one of the most used technical indicators in trading. Forbidussi mentioned that in it, you can see how on February 20 the SOL/USDT pair broke the upper band on the daily chart, giving signs that the price was going to correct.
“And so it has done, at the time of writing the article, the price was at USD 22.50, with a support at USD 22.31, which is also close to the MA21 of SOL/USDT”said.
Having said this, Forbidussi revealed that in the short term on the daily chart, it would be best to wait for the price to get closer to the lower band, since in his opinion Bollinger Bands are more reliable at this point. “That is, if it hits the lower band ($19.70) it could turn up, back to the upper band”he expressed.
Fig 3. SOL/USDT daily chart. Source: Binance/TradingView.
Will Solana return to 100 dollars?
Finally, according to Forbidussi, reaching 100 USD is not yet possible for Solana, since it would take a long time and if it goes up, it would go up to the resistance of the EMA 200 (27.99 USD).
“This cryptocurrency has a long fight ahead of it, and it will not be an easy task to win that battle, as it has recently lost the trust of developers and the general public due to its ties to FTX. But it is already known that time is capable of healing wounds. Even so, my recommendation is not to bet financially on Solana and if you want to do it, it is preferable that it be as little as possible “he concluded.
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