Solana Ascending Triangle Formation Anticipates Price Surge, $90 Target In Sight

Since October 2023, Solana (SOL), often called the Ethereum killer, has seen significant network and price action growth. 

However, everything points out that the most notable growth in recent months has been in SOL’s price, which has surged over 368% year-to-date, taking the token from a low of $7.95 in 2022 to a now staggering $64.20, with an annual high of $68.

But are these numbers reflective of fundamental growth, or are there discrepancies between price action and network progress? 

According to Ally Zach, a research analyst at Messari, SOL has experienced significant growth since its December 2022 lows. The price of SOL has increased by over six times, while active addresses and Total Value Locked (TVL) have doubled. 

Initially positioned as a decentralized finance (DeFi) hub, Solana has diversified over time, introducing new infrastructure and tools, such as compressed non-fungible tokens (NFTs), which have led to the emergence of new consumer applications on the platform.

According to Zach’s latest report, throughout most of 2023, consumer apps served as the primary entry point for first-time users on Solana. However, early November’s “breakpoint event” reignited Solana’s DeFi sector. 

A series of airdrop announcements for major projects in the ecosystem, particularly the airdrop by JupiterExchange, propelled the DeFi sector to the forefront. These airdrops, coupled with new token launches, have boosted market caps and decentralized exchange (DEX) TVL, attracting users through the trading potential of these tokens.

Notably, Solana’s new DEX users exhibit different behavioral patterns compared to airdrop farmers on other networks. Instead of high-frequency, low-volume transactions involving stablecoins, these users actively trade small and mid-cap tokens and spend more per swap. 

This suggests a more sustained and engaged user base, moving away from transient farming practices. DEXs play a crucial role in the decentralized finance ecosystem, deriving strength from the diversity and robustness of the surrounding apps and tokens.

Ally Zach’s analysis suggests that Solana’s newest user base, including newcomers and veterans, is shifting away from typical airdrop farming behaviors. 

This shift indicates the potential for these users to become long-term contributors, strengthening the sustainability of the Solana ecosystem.

In addition to the potential long-term growth of the Solana network, the price of SOL is not far behind. Prominent crypto analyst Ali Martinez has identified an intriguing price pattern for SOL that indicates the potential for further gains soon. 

Martinez highlights an ascending triangle formation on the 12-hour chart of SOL, suggesting a continuation pattern that typically precedes upward price movements.

The ascending triangle formation implies that SOL’s price has been consolidating within a tightening range, with higher lows and a resistance level of around $68.2. If SOL manages to sustain a close above this critical level, it could trigger a bullish breakout, potentially propelling the price toward the $90 mark.

However, Martinez advises caution and emphasizes the importance of monitoring the $60 support level. Any signs of weakness or a breach of this level may trigger a spike in profit-taking by traders, potentially leading to a temporary price decline. In such a scenario, SOL could experience a dip, potentially reaching as low as $47.

Featured image from Shutterstock, chart from TradingView.com