TA: Indicators Showing that SOL Has Reached a Top Margin

SOL has been one of the standout performers in the crypto industry for the past few weeks. The coin gave many investors a haven, especially when the market started to go sideways. Most coin prices were taking a beating, but SOL stood firm.

There is no doubt that the SOL resurgence has been impressive. The coin’s performance over the past few weeks has been incredibly inspiring. But, unfortunately, you often see a large-cap coin standing firm even when the entire market is going down. Most of the time, the most valuable coins tend to be the ones to suffer the most significant hits when there is a downturn.

Standing Tall Against the Market

The effects of SOL’s rise were simple to see. Many investors immediately dumped several other large coins and bought this one instead. Data from CoinShares showed that investors were flooding the currency with funds. SOL even led other names like Bitcoin and Ether when it came to institutional money inflows.

With the coin now getting attention, it was off to the races. Companies offering crypto investments began supporting SOL. In addition, deltas Exchange launched options trading for SOL, offering investors a new way to make speculations with the coin. While the options only have daily maturity, for now, Delta has confirmed that it would add weekly and monthly maturities as well.

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Delta wasn’t the only company to increase exposure to SOL. Last week, Deutsche Boerse announced exchange-traded notes (ETNs) backed by SOL.

Deutsche Boerse is the operator of Germany’s stock exchange, and it partnered with VanEck on the initiative. Its announcement confirmed that the ETNs are now tradable on its Xetra digital stock exchange and the Frankfurt Stock Exchange.

The company added that investors would buy ETNs like exchange-traded funds (ETFs) and their shares. They won’t need to set up their wallets, and they will be in charge of their clearing.

Increased Activity on the Solana Blockchain

It is also worth noting that the Solana blockchain is looking to expand. The blockchain is one of the famous “Ethereum killers” – blockchains looking to usurp Ethereum. So far, its profile has boosted significantly this year.

With SOL on its bull run, several projects on the Solana blockchain caught investors’ attention. One of them is Orca – a decentralized exchange. The company concluded its Series A funding round, raising $18 million from investors. Orca said that it would use the funds to keep developing its automated market maker for Solana.

It is interesting as Orca only launched this year. But, the company has been able to grow considerably, and a funding round is its reward.

Grape Protocol

There is also Grape Protocol – a development tool that is native to Solana. Grape offers the tools for developers to build decentralized autonomous organizations (DAOs). Last week, the company completed a funding round, offering tokens and raising $1.2 million.

Grape had been so popular that one of its initial decentralized offerings (IDOs) caused an outage on Solana. Still, the company was able to hit its fundraising goal on its second try.

Then, there is FTX – a leading derivatives exchange. FTX has been breaking ground for a while, and the company recently launched a marketplace for non-fungible tokens (NFTs). The marketplace will only be available to American customers, and it will allow seamless NFT sales.

Among other things, FTX’s new platform will allow users to mint and sell NFTs. Moreover, it can trade the tokens between the Ethereum and Solana chains. This is especially big, considering how NFTs have become. They are a buzzing part of the crypto industry, and companies are now rushing to support them.

All of these and more have been boosts to SOL. They constitute a significant part of why the coin is now up 302.6 percent in the past three months.

Analysis: Has SOL Reached a Top?

While SOL was able to cross $215 when the market was downturned, it has since retreated. SOL hit an all-time high of $216 on September 9. This followed a rally of 508 percent since August. Thanks to the bull run, several investors predicted a price of $500 for the coin.

During this rally, average network fees on Ethereum crossed $40. This means that many developers were looking for an alternative. Naturally, Solana was a choice. But, all of that appears to be dwindling. Demand for SOL futures looks to be slipping, and this is never a good sign.

As the image below shows, trading volumes and open interest for SOL futures on FTX have dropped. FTX is the leading marketplace for SOL futures, and its indicators are usually a precursor for the coin. With primary metrics dropping, it seems that SOL might have reached the top.

It is also worth looking at the technical indicators behind SOL. First, the coin is currently trading below its short-term moving average metrics—these range from the 10-day MA of $139.14 to the 30-day MA of $151.36.

Thankfully, SOL remains on top of its long-term MA metrics. So, it is more suitable for long-term investors. On the other hand, if you’re looking for short-term gains, SOL might not be best for you.

It is also worth noting that SOL’s moving average convergence divergence is positive. This is a good sign for investors looking to buy. The coin’s relative strength index (RSI) of 50.71 is rising but still underbought.

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In conclusion, there is a lot to consider when thinking about investing in SOL. The coin is a solid buy option for long-term traders and investors, but its short-term outlook suggests that a top might have shown itself.