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• Solana rallied in 2023 but failed to break above the horizontal resistance.
• A bullish case remains valid unless the price moves below the 2022 lows.
• If it breaks above horizontal resistance, Solana may trade above $40.
Price Action
In 2023, cryptocurrency investors witnessed a surge in Bitcoin’s price that triggered similar movements with other major cryptocurrencies, including Solana. The token more than doubled this year, rising from $10 to over $25 in what appeared to be a clear bullish breakout. However, after trading above $26 in January, the market failed to build on the bullish trend and started consolidating instead.
Bigger Picture
To determine if there is still potential for further growth in Solana’s price, it is important to look at the bigger picture. As long as the price remains below horizontal resistance and does not dip below 2022 lows, a bullish scenario can still be built. If conditions remain favorable (i.e., US dollar weakness), then a break above this level could trigger gains towards $40 or higher.
US Dollar & Inflation
The US dollar has so far traded with mixed results in 2023; however, as the Fed is on pause currently, renewed weakness could benefit cryptocurrencies and Solana alike. Should inflation data prove correct and exhibit an upward trajectory in the second half of this year – something that could weaken USD even further – then prices may rise accordingly beyond $40 per token or higher.
Conclusion
Solana is currently bearish while trading below horizontal resistance; however, a break above it may indicate further strength ahead should US dollar weakness resume due to expected inflation data later this year. Therefore, provided that current lows are held and conditions remain favorable for cryptocurrency markets overall, then there is an opportunity for growth beyond its current levels.