Solana (SOL) recently achieved a notable milestone by breaking through an eight-month-old resistance level, reaching a new three-year high of $215. The cryptocurrency, renowned as an “Ethereum killer” due to its scalable blockchain technology, has now seen its market cap exceed $100 billion, making it the fourth cryptocurrency to do so.
Despite this achievement, there are signs of potential challenges. A decline in active addresses on Solana's network has created a Price DAA (Daily Active Addresses) Divergence, pointing to possible selling pressure. Historical trends suggest that when price increases while active addresses decrease, it indicates a lack of engagement, risking momentum dips.
Additionally, technical analysis suggests caution. The Relative Strength Index (RSI) indicates Solana is in the overbought zone, historically leading to short-term corrections. If the RSI remains elevated, Solana could face a reversal, especially if investor enthusiasm cools. This overbought status hints at potential challenges to continued upward momentum.
Solana's price prediction points to crucial support levels. With SOL currently around $205, maintaining momentum above $201 is vital. Failure at this level could lead to declines toward $186, a critical support floor. Consistent profit-taking may trigger a significant price drop if this support is breached.
Conversely, rebounding from the $201 support could see Solana attempt to surpass the next key resistance level at $221. Successfully overcoming this resistance might push Solana’s market cap back above $100 billion, restoring bullish sentiment and countering the current bearish outlook.
