Solana (SOL) Price Forecast: 3 Reasons SOL Could Hit $200 in May 2024

FXEmpire.com -

Solana’s price reclaimed the $155 territory on Tuesday, May 7, bringing its monthly timeframe gains above the 25% mark. Critical market indicators suggest more SOL profits ahead in May 2024.

Solana Price Surges 31% in 6 Days

The global crypto market has been on an upward trajectory in May 2024, and as expected, Solana and other mega-cap crypto assets like BTC and ETH have been at the forefront of the rally.

Solana SOL Price Action in May 2024

Solana price is trading around $155 at the time of writing, reflecting a 31.9% surge within the first 6 days of May 2024.

The ongoing crypto market recovery has been largely attributed to positive headwinds from recent US macroeconomic indices reports. However, Solana derivates market data reveals a unique bullish catalyst that could propel SOL’s price further upward in the days ahead.

Solana Open Interest Has Increased $260M.

Recent trends observed in the Solana derivatives markets suggest that investors are now growing increasing confident and making big bets that the 31% SOL price surge will advance further.

Coinalyze’s Open Interest metric tracks the dollar value of active perpetual futures contracts listed for a specific crypto asset. It serves as a tool for gauging investors’  participation rate and the overall direction of their trading sentiment.

Solana SOL Open Interest

The chart above shows how SOL Open Interest has increased by $260 million since the start of May 2024.

Typically, such a significant spike in open interest during a price uptrend signals that the majority of Solana speculative traders are confident of further gains and piling on new positions to amplify their potential profits.

More so, while the price of Solana increased by 31.9% in May 2024, this $260 million increase in Open Interest represents only a 19% growth. With the price growth far outpacing the open interest surge, it suggests that the SOL rally is driven more by organic demand in the spot markets than speculative activity.

This bullish market alignment puts SOL in a position to maintain relatively high support levels in the event of a price correction phase in the days ahead.

SOL Price Forecast: Rocky Road to $200?

Solana’s price is currently trading at $155. However, drawing insights from the $260 million capital inflows recorded in the first 6 days of May 2024, most investors are advancing further upswing towards $200 in the days ahead.

However, the key resistance clusters highlighted by the Bollinger band indicators show that reaching $200 will not be a cakewalk for the bulls.

Solana SOL Price Forecast

As seen below, Solana now faces a major sell-wall at the $158.27 territory. If the bull can stage a decisive breakout above that range, a $200 retest could be on the cards as predicted.

But if the bears attempt to force another correction phase, bulls can find a formidable short-term support cluster at the $143 20-day SMA price level.

It is also important to note that Solana’s price action has been positively correlated with memecoin markets in recent months. And with the likes of Dogwifhat (WIF), Shiba Inu (SHIB), and Dogecoin (DOGE) racing up the top gainer’s charts last week, if the meme sector rally persists, historical data suggests it could enhance the chances of SOL price reaching $200 in May 2024.

This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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