Crypto News– SOL price rally has demonstrated its resilience to investors amidst swirling rumors of a potentially massive liquidation event involving the troubled exchange FTX. The history of the smart contracts token’s association with FTX, dating back to November, has cast a shadow over its performance, particularly its drop to $8.
SOL Price Rally: 5% Growth After FTX Liquidation Alarm
Investor concerns initially revolved around the court’s approval for FTX to liquidate its crypto holdings, a significant portion of which is in Solana. Many anticipated a substantial price decline. However, as recent reports indicate, FTX plans to execute the liquidation in a structured manner, releasing $100 million worth of assets weekly, with the possibility of increasing this amount to $200 million in the future. The 5% price increase observed on Thursday, pushing SOL to $18.85, suggests that Solana may have reached a bottom and is awaiting a catalytic event to initiate a bullish rally. The previously discussed support level at $17.5 appears robust enough to maintain the ongoing uptrend, supported by the lower ascending trendline.
Traders should keep a close eye on the Moving Average Convergence Divergence (MACD) indicator for a potential buy signal, which would confirm the legitimacy of the emerging uptrend targeting price levels beyond $20. Confirmation would be signaled by the blue MACD line crossing above the red signal line, indicating a strengthening bullish momentum.
Despite the 5% surge, Solana remains in a somewhat uncertain territory. A subsequent breach of the upper ascending trendline would act as a signal that the odds favor price gains above $20. Until such a break occurs, traders should exercise caution, as there is no assurance that SOL’s price won’t retrace and weaken the $17.5 support, potentially leading to a prolonged downturn towards $13.5 and $10 if panic selling ensues.
On the four-hour chart, a more pronounced bullish resurgence is evident, reinforced by a buy signal from the MACD indicator. If SOL can maintain its grip on the $17.5 support level and close the gap to $20, it may gain more favor among traders as a solid investment opportunity.