- Recent data indicated a rise in long positions on SOL, alongside a rise in trader confidence
- The latest pullback appeared to be part of a natural consolidation cycle, positioning SOL for a potential breakout on the charts.
The past 24 hours, Solana [SOL] dropped 3.72% on the charts, cutting its weekly gain to just 0.99%. Over the past month, the asset has risen 11.96% even as it has struggled to achieve sustainable growth.
According to AMBCrypto’s analysis, there could be several factors driving SOL’s potential recovery, with the asset potentially well-positioned for further gains in the near term.
More traders are betting on the SOL rally
A recent one report van Santiment revealed that 83% of SOL traders are bullish and placing long bets on the asset. This figure puts SOL in the 98th percentile, indicating overwhelming confidence in its earnings potential.
When a significant majority of traders remain bullish, it is often a sign of strong market commitment, even in the face of price swings. This behavior indicates a willingness to hold the asset despite volatility, which is likely to fuel an upward price movement.
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This sentiment seemed to be in line with data from Coinglass on the SOL/USDT pair on Binance. Among top traders and general accounts, long-to-short ratios were 5.5833 and 5.1425, respectively. Both indicate a strong bias towards long positions.
A long-short ratio above 1, or a ratio moving further north, indicates a largely bullish market outlook. The prevalence of long positions can positively contribute to the asset’s price trajectory.
Rising demand could push SOL higher
At the time of writing, demand for SOL was increasing, driven by significant outflows of SOL from the exchanges in recent days. This shift placed Exchange Netflows firmly in the negative.
Data from Coinglass also revealed negative net flows of $112.29 million in SOL from exchanges in the past 48 hours.
Taken together, these trends suggested that a majority of traders and investors are shifting their assets to private portfolios for long-term investing. Such behavior typically reduces the circulating supply on the exchanges, leading to increased demand, often resulting in upward price movements.
Source: Coinglass
Another factor contributing to SOL’s growing appeal is the recent increase in Total Value Locked (TVL), as reported by Look at chain. Over the past seven days, Solana’s TVL has grown by $618.4 million – a clear indication of increased activity across protocols in the ecosystem.
SOL forms a bullish flag pattern
SOL has been in a consolidation phase lately, forming a bullish flag pattern that typically precedes significant price increases.
During this phase, SOL has been trading within a defined range of $220 to $250, which represents an accumulation period for large holders and long-term investors preparing for a possible breakout.
Source: trading view
If the bullish flag pattern holds, SOL could rise to $315, marking a high upside from the market price at the time of writing. This potential move highlighted the assets’ strong upward momentum and growing investor confidence.
Credit : ambcrypto.com
