Altcoin
Altcoins Follow 2016 Patterns: Good News for Solana?
- Solana price has fallen by more than 11% in the last 7 days
- Market parameters and indicators have hinted at an increase in prices on the charts
The ongoing market appears bearish for most cryptocurrencies, including major altcoins Solana [SOL] who struggle to paint their rankings green. However, if you consider the macro perspective, things could soon turn bullish.
Here’s how it will play out, especially if altcoins follow a specific historical trend.
History could repeat itself again
CoinMarketCap data revealed that Ethereum [ETH]The price of has fallen by more than 4% in the last 7 days. In fact, other top alts like it BNB and Solana saw declines of 11% and 12%, respectively.
Meanwhile, Mustache, a famous crypto analyst, shared a file tweet highlighting an interesting development. The tweet rightly points out that altcoins have followed a similar pattern to that of 2016-2017. During this period, the altcoin’s market capitalization consolidated near its 2012 market high for some time, before reaching new highs in 2017.
Similarly, in 2014, the altcoin market capitalization was consolidating near its 2017 ATH. Therefore, if history repeats itself, investors may soon see altcoins, including SOL, reach new highs.
Will Solana Lead the Altcoin Rally?
AMBCrypto then planned to analyze SOL’s on-chain data to see if it hinted at a bullish rally in the coming days. According to our analysis of Santiment data, SOL’s weighted sentiment has improved since the decline on June 9th.
This means that bullish sentiment around the token has increased in recent days. Furthermore, its social volume has also remained high, reflecting its popularity in the cryptocurrency industry.
Source: Santimento
Aside from that, things looked pretty optimistic for Solana in the derivatives market as well. We found that as SOL’s price fell, its open interest also dropped dramatically.
A decline in this parameter usually suggests that the chances of a trend reversal are high. Furthermore, its financing rate has also decreased slightly.
In general, prices tend to move in the opposite direction of financing rates, further indicating a possible bullish rally on the charts.
Source: Santimento
Finally, we took a look at SOL’s daily chart to see if market indicators also supported the possibility of a bullish breakout. According to our analysis, its Relative Strength Index (RSI) remained below the neutral level. However, it saw a slight increase.
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A similar pattern was also noticed by Chaikin Money Flow (CMF).
If these indicators and parameters turn out as expected, then it is very likely that Solana, along with other altcoins, will reach a new all-time high in the coming months.
Source: TradingView
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