Home CryptocurrencyAltcoin Three reasons why Solana price could approach $200 in March

Three reasons why Solana price could approach $200 in March

by SuperiorInvest

Solana (SOL) looks set to experience a massive bullish move in March, based on a combination of technical and fundamental indicators.

Possible breakout of SOL price ‘bull flag’

As of January 18, SOL price was testing the upper trend line of what looks like a bullish flag pattern.

Bullish flags are bullish continuation patterns characterized by price movement within a downward-sloping channel (flag) following a strong bullish movement (flagpole). They usually resolve after the price breaks above the upper trend line of the channel and rises to the height of the flagpole.

Therefore, Solana foresees a break above its flag’s upper trend line towards $194, around 80% higher than current price levels, by March.

SOL/USD daily price chart. Source: TradingView

Conversely, a pullback from the upper trendline could see SOL price decline towards its lower trendline near $80.

However, the cryptocurrency may witness some accumulation and sideways price action at its 50-day exponential moving average (50-day EMA; the red wave) near $87, which has served as a long-term support zone. Staying within the flag’s range would keep the breakout possibility intact.

Solana ETF Rumors

The approval of Bitcoin spot ETFs on January 11 has raised hopes in the industry that other cryptocurrencies, including Solana, may also get a spot ETF in the future.

Franklin Templeton, a trillion-dollar asset management firm, further fueled the buzz around the Solana ETF after praising the blockchain for its advances in DeFi, infrastructure, NFT innovation, and memecoins. The company already offers a Bitcoin ETF product with the same name under the symbol (EZBC).

Anticipation of a Solana spot ETF could catalyze a surge in SOL’s price, similar to the rally Bitcoin experienced prior to the approval of its ETF.

Fed rate cut expectations

Expectations of a dovish Federal Reserve may further boost Solana prices in the coming months.

CME Fed Futures Fund Rate Projections see a 59.5% chance of a 25 basis point US interest rate cut by March 2024.

Target rate probabilities for the March 20 Fed meeting. Source: CME

Lower interest rates may weaken the US dollar as yields on dollar-denominated assets fall. Cryptocurrencies like Solana, which are often priced against the dollar, can increase in value as the dollar weakens.

Related: Fed Rate Cuts Could Be a Boon for DeFi and Stablecoins – Fidelity

The technical setup for the US Dollar Index (DXY) indicates a period of sell-off in the coming days. Notably, it has been forming a rising wedge pattern since December 2023, with its downside target between 101.50 and 102.25, depending on the breakout point, as shown below.

DXY daily price chart. Source: TradingView

Therefore, Solana’s persistent inverse correlation with the US dollar should also increase the likelihood of SOL seeing a major rally in March.

This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.

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