Journalist
Posted:
- SOL’s positive sentiment is now at an 18-month high
- As demand for SOLs continues to rise, volatility has also emerged
SOL’s positive sentiment has risen to an 18-month high, according to data provider Santiment on X (formerly Twitter).
📈 #Altcoins recover quickly after #crypto-wide decline in recent days. In particular, #Solana has risen above $71 again and is gaining rapidly compared to the majority. The positive sentiment may need to cool off a bit before a serious run can take place. https://t.co/yu9F1MgkOw pic.twitter.com/vXbJbN0Kda
— Santiment (@santimentfeed) December 12, 2023
Santiment added that the uptick in positive sentiment after the altcoin is due to a series of airdrops to be carried out by some of the new projects on the Solana network.
AMBCrypto even had that reported previously that some Solana-based projects, such as Jupiter, Zeta and Drift, have upcoming airdrops planned.
SOL wins, but there’s a catch
The rise in positive sentiment has resulted in a steady increase in the price of SOL. The coin briefly traded at $74 on December 9, its highest price level since May 2022.
While there has been a slight pullback since then, the coin was still exchanging hands above $70 at the time of writing, data shows CoinMarketCap revealed.
A review of the coin’s price movements on a daily chart showed that coin accumulation among spot market participants continued. At the time of writing, the key momentum indicators were also above their respective midlines.
For example, SOL’s Relative Strength Index (RSI) read 62.47, while the Money Flow Index (MFI) read 68.17. These values suggested that there is strong buying pressure behind SOL.
Moreover, SOL’s Chaikin Money Flow (CMF), which signals an inflow of liquidity, remained above the zero line in the positive zone. A CMF value above zero is typically interpreted as a sign of strength in the market.
Read Solana’s [SOL] Price forecast 2024-2025
However, the double-digit increase in value over the past thirty days has resulted in the re-emergence of market volatility. AMBCrypto assessed SOL’s Bollinger Bands (BB) indicator and found a steadily widening gap between the upper and lower bands of the indicator.
A gradual widening of this range generally indicates an increase in market volatility. The coin’s Bollinger Bandwidth, which has grown 105% over the past week, confirmed the rising volatility.
Additionally, SOL was trading near the upper band of its BB indicator at the time of writing. When an asset’s price trades this way, traders often interpret it as a sign that the asset may need a pullback or correction.
Finally, SOL’s Average True Range (ATR), which is up 14% over the past seven days, confirmed the growing volatility. This indicator measures market volatility by calculating the average range between high and low prices over a certain number of periods.
Source: SOL/USDT on TradingView
