Over the past week, Bitcoin and Ethereum’s price pumped by 8.2% and 7.5% respectively. However, most of the other coins managed to fetch higher returns to their investors. Solana’s value, for instance, appreciated by over 12% in the same timeframe. In fact, the alt was trading at $43.61 at the time of writing.
Can SOL’s rally continue
According to Messari’s data, Solana’s circulating supply has witnessed a sharp spike from 272 million to over 284 million in just a span of two days. Interestingly, the supply has seldom breached this level before. Ergo, it can be inferred that more coins are circulating amongst market participants at this stage.
Source: Messari
The alt’s sharpe ratio has, additionally, made a phenomenal comeback in just 30 days. On 16 July, this metric’s reading stood at -2.9; but the same, at the time of writing, it reflected a value of +3.6.
As such, this ratio outlined the potential risk-adjusted returns of an asset. As a rule of thumb, a sharpe ratio more than 3 is considered to be ‘excellent’ by market participants. Thus, higher the sharpe ratio, the better the returns fetched. To be more clear-cut, SOL holders, at this stage, are being compensated more than usual for the risk borne. In retrospect, this is an additional incentive for participants to stay back in the market.
Solana’s volumes have also started recovering from its mid-July lows. Interestingly, the current levels are quite congruent to that of mid-April when the alt was rallying. If the buying-side volume ends up picking up pace in the coming days, traders can expect SOL’s price to inch towards its mid-May highs.
Source: Santiment
Price Targets
Solana’s price, at the moment, is hovering around the $44.172 resistance level. The alt was rejected at this point a handful of times during the initial few days of June. However, in the next few hours, if SOL manages to break above this hurdle, its price has the potential to shoot upto the $48.
If market participants respect the price rally, then one can expect the alt’s valuation to jump to a level as high as $58.4 in the next few days. A failure to break above the any of the resistance level could see the alt’s price dip back to $37.2.
SOL/USDT|| Source: TradingView
Other Developments
Solana’s adoption too, for that matter, has been gaining momentum. Recently a new bridge called Wormhole was launched to allow networks like Solana, Terra, Binance Smart Chain and Ethereum to communicate with one another. This launch would make governance decisions easier and would additionally enable the transfer of cross-chain liquidity.
Given the development activity and the state of the metrics, market participants can brace themselves to witness SOL’s price create new ATHs in the coming days.
