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The recent price rally in the Solana (SOL) market has lost momentum along the way as traders’ attention shifted to rumors of the bankruptcy of crypto-focused hedge fund Alameda Research.
On November 7th, the price of SOL fell by nearly 6% to around $30.50. Intraday selling occurred as part of a broader pullback trend that began on Nov. 5 when the SOL peaked near his $38.75 level. Since then, Solana token has fallen more than 20% of his.
The beginning of SOL’s plunge coincided with reports that Alameda Research has $8 billion worth of debt, but may not have the liquid assets on its balance sheet to meet those obligations.
Interestingly, the values of all these assets including SOL, FTX Token (FTT), Serum (SRM) and Oxygen (OXY) plunged synchronously in the last 48 hours. This is due to fears of a cascading liquidation if Alameda Research becomes insolvent.
1. Tokens with low liquidity
$4.6 billion of assets are in illiquid tokens.
There is no other way than SOL to liquidate the remaining holdings without completely crashing the market.
The last four on the list are also very sparse.
otteroooo (@otteroooo) November 7, 2022
Nonetheless, traders expressed interest in keeping the SOL price above the technical support level of $30 on Nov. 7. One of the reasons, he said, could be the optimistic news that emerged over the weekend, including the launch of smartphones, DApp stores, and Google Cloud. partnership.
Additionally, Solana continues to enjoy strong support in the non-fungible token (NFT) sector. For example, the total number of NFTs released on the Solana blockchain increased by 19.3% quarter-on-quarter, surpassing 8 million in Q3 2022.
Solana’s several developments across the NFT sector have allowed us to maintain a strong position compared to our top L1 peer group. Secondary NFT sales volumesaid James Trautman, a researcher at data resource Messari.
Secondary sales volume surpassed Ethereum in early September. Most of the activity during that period was on Magic Eden V2.
November 2nd, Instagram We’ve added support for Solana-based NFTs, allowing users to create, market, and sell their favorite digital art and collectibles.
As mentioned earlier, the SOL price correction showed signs of exhaustion when it retested the $30 support level on Nov 7.
Since August 2022, two rebounds from this support line have pushed the SOL back close to $37. It was the same price cap combined with months of downtrend line resistance that capped Solana token price gains in the week ending November 6th.
RELATED: Solana co-founder tackles blockchain trust with Breakpoint
By December 2022, if the $37 resistance line is broken out, SOL could then test the $44.25-$47 range or see a 50% price rally measured from current price levels. I have.
Conversely, if it breaks below the $27.75 to $30 support area, there is a risk that the SOL price will drop around $19.50, or about 40% below today’s price.
As shown in the chart above, the $19.50 level provided support from March to July 2021.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment and trading movements involve risk. You should do your own research when making a decision.
