The Solana (SOL) cryptocurrency was once backed by Sam Bankman-Fried and has now recovered some of its losses on December 30. It had just fallen to its lowest level since February 2021.
Solana down 97% since November 2021
On the daily chart, the price of SOL rallied to around $10.25, up 20% from its low of $8.
However, this rally did little to counter the overall downtrend. The coin is down 97% from its high of $267.50 in November 2021. It is down 20 percent over the past week.
While it’s been a generally tough year for the markets, Solana is now among the worst performing tokens in 2022, alongside FTX and LUNA. They are both down 98% each.
SOL price could recover by 50%
However, the recent recovery in Solana suggests that 2023 could still be on the upside.
This is mainly due to the doji candlestick that forms when assets open and close at roughly the same level within a time frame. SOL formed a so-called “Standard Doji” on its daily chart on December 29th.
Traditional analysts view a doji candle as a potential reversal pattern because it shows bears and bulls pulling the rope equally. Technically, a doji candle in a long uptrend means a bearish reversal is occurring and vice versa.
The Doji candle at SOL formed after a long downtrend, as seen in the daily chart below. Combined with the oversold RSI (
The main target higher on the SOL is around $15, or 50% above current levels. The $15 level has acted as resistance since November 13.
Negative fundamentals are an obstacle
Solana is among the worst performing tokens in 2022, down 97% on the year. In comparison, the total market capitalization of all cryptocurrencies only fell by 65% over the same period.
There are several reasons for SOL’s poor performance in 2022, including dovish Federal Reserve policy, frequent Solana defaults, a hack that stole $200 million, and possible FTX holdings.
In early December, Anatoly Yakovenko, co-founder of Solana Labs Inc., clarified that nearly 80% of projects on the Solana blockchain have no money on FTX. He explained that there is more to the platform than the now defunct crypto exchange.
This article does not constitute investment advice or a recommendation. Every investment and every transaction involves risk. Readers should do their own research when making a decision.