Solana price stays above $120 due to strong technical strength, rising participation in DeFi, and increased derivatives positions as market participants have their attention focused on the potential continuation of the SOL bullish trend.
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Solana is trading at $121.69, which represents a 0.23% increase from the previous day. Solana reached an intraday high of $124.95, while the recent bullish trend was accompanied by increased activity in the spot and derivative market segments.
Also Read: Solana Price Signals Recovery to $143 as Network Activity Strengthens
Why Is the Solana Price Holding Above $120?
The Solana price has significantly increased following the breaking of the $94.85 level, as seen on the TradingView chart. The SOL price has increased from below $100 in September to above $120, suggesting sustained demand for Solana in the recent rise.
According to the chart, there is another support level at $73.62. At the moment, the ability of the price to stay above $120 maintains the current bullish formation, while falling back below $94.85 would weaken this formation.
What Does the Solana Price Chart Show?
The TradingView indicators are still showing positive momentum. The RSI stands at 68.44 and is above the moving average of 62.91. This placement of the momentum indicator places it below the standard 70 mark and does not yet show that SOL has entered the traditional overbought zone.
The MACD supports this upward move. The MACD line is 6.40 and higher than the signal line which is 5.36 and a histogram reading of 1.04.
The conjunction of upward prices, MACD above zero and an RSI of less than 70 indicates that the buying momentum is sustained despite the market approaching a level where the market might begin to cool down.
Also Read: Solana Price Eyes $176 Rally as Breakout and Network Activity Strengthen
How Is DeFi Activity Affecting Solana Price?
Similarly, the Solana ecosystem as a whole demonstrates increased activity during the same period. According to the DeFiLlama graph, TVL on Solana is growing from around $4.7 billion at the beginning of August to $6.7 billion at the end of September.
In addition, according to the graph, DEX volume, number of active addresses, and transactions continue to be active until September. While these indicators show that both network and DeFi activity are high, they alone cannot prove that the increased activity of the ecosystem was responsible for the increase in SOL price.
What Do Derivatives Data Show About Solana Price?
Information provided by CoinGlass adds another dimension to the prevailing market story. The open interest of Solana is now up to around $7.5 billion, while derivatives volume is now above $12 billion as per the above-mentioned chart.
Open interest and prices going up together show that a higher number of leveraged trades are being built as SOL moves higher. This situation may lead to even bigger moves in the price action in one way or another.
Also Read: Solana Price Eyes $1,000 Rally as DEX Activity Strengthens Bullish Setup
What Is the Effect of the Lookonchain Post on Solana Price?
According to the Lookonchain post, a trader opened a 20x long position of 550,087 SOL worth $67.88 million about a month ago. The current unrealized profit of the position exceeds $23 million, with the take-profit levels being set at $200.
“If $SOL reaches $200, he could make over $65M in profit!”
What is important to note from this post is not that SOL might reach $200 but that it shows how much leverage can be used on this token. The position fits the technical outlook on SOL since traders are watching if SOL can continue gaining more without facing a major correction.
What Is the Next Level for Solana Price?
The next level to watch out for in terms of interest is $124.95, the latest high available on the TradingView chart. An increase past this level will be seen as the continuation of the current uptrend, otherwise, the focus might shift to $120 and finally $94.85.
Looking at the bigger picture, the outlook remains positive due to the bullish MACD signal, an RSI of less than 70, growing TVL, and rising derivatives market volume.
At the same time, a growth in open interest indicates that traders should be prepared for stronger moves in case the trend reverses.
Therefore, Solana’s future movement will depend on whether the buyers will manage to maintain momentum above $124.95.
Also Read: Solana Price Holds Above Key EMAs as Bulls Target $121
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
