Key Points
- Solana (SOL) has regained dominance over its rivals, setting it up for short-term gains.
- However, reaching a new ATH might require more time and the overcoming of several challenges.
Solana (SOL) has been making waves in the crypto market, outshining its competitors and setting itself up for potential short-term gains. However, the journey to a new all-time high (ATH) might require a little more patience.
Despite the market’s fluctuating odds and the wavering hopes for Bitcoin (BTC) to hit $100K in a single bull run, the current climate seems to favor altcoins. Altcoins have been breaking psychological barriers and outperforming Bitcoin with gains that have doubled its pace.
Altcoins Shine as Bitcoin Struggles
In the previous cycle, Solana reaped the most benefits, but this time around, its rivals are taking the spotlight. Cardano (ADA), for instance, has been posting higher highs. As Bitcoin struggles to break resistance at $93K, altcoins seem poised for short-term gains.
For a parabolic run, however, Bitcoin must surpass this resistance to restore investor confidence in the market. Solana, on the other hand, faces other challenges that could hinder its push toward a new ATH if left unresolved.
Solana’s Potential Paths
The past 24 hours have been crucial for Solana, which broke free from a five-day consolidation with a 9% jump in a single day. This level was last seen three years ago during the cycle when Solana reached its ATH of $260.
This breakout comes at a time when Bitcoin is locked in a tug-of-war to overcome resistance at $91K. Meanwhile, on the daily charts, XRP has stolen the spotlight with a massive rally, gaining over 70% and breaking the $1 barrier.
The increase in newly created wallets on the Solana network is approximately 30.77%, rising from 15.6 million to 20.4 million in just five days. This surge reflects growing interest, fueled largely by FOMO, as anticipation for a breakout intensifies.
As a result, Solana seems poised for a short-term surge to around $248. However, given the extreme market volatility, its rally could be capped at this target. The next move might be a correction before reaching a new ATH or waiting for an underlying catalyst.
The Waiting Game
While the bullish on-chain data paints a promising picture, the overall market sentiment must not be overlooked. The RSI is in an overbought state, with 81% of price movement over the last two weeks being upward, signaling overheating. Thus, to prevent weak hands from exiting, the focus now shifts to the fundamentals.
Investors are at a crossroads regarding Bitcoin’s long-term potential, awaiting a major catalyst to push it above $93K. Its consolidation below $91K suggests that bulls are consistently defying bearish pressure across various metrics.
While altcoins are capitalizing on this momentum, historically, parabolic rallies are often driven by Bitcoin itself. So, unless stakeholders identify Bitcoin’s next market bottom, top altcoins may need to wait before breaking through psychological levels.
In conclusion, despite new entrants adopting a ‘long’ view on Solana, it might not be enough to break through $260. For a repeat of the 2021 cycle, bulls first need to break Bitcoin’s resistance at $93K. This could spark a rally, with the next dip around $95K, potentially setting the stage for Solana to hit $260. For that to happen, investors must continue to favor SOL over other altcoins.
