Solana soared to a record high of $295.83 on January 19 amid the frenzy surrounding meme coins. Although SOL's price has since dipped by 22%, investors remain hopeful that it will bounce back and surpass this peak in February.
Examining the current situation, BeInCrypto delves into the potential for a rally back above $290 or a continuation of the downward trend for Solana.
Mixed signals are swirling around Solana as rumors circulate about the launch of futures contracts on the Chicago Mercantile Exchange (CME), which could drive SOL's price higher next month.
A recent post on CME's website hinted at the possible introduction of Solana futures on February 10, causing a 3% uptick in SOL's price. However, CME later clarified that the post was an error, leaving the fate of futures contracts for Solana uncertain.
Despite the confusion, investors are eagerly monitoring the situation. Should CME give the green light for Solana futures, it could serve as a significant boost for SOL's price, potentially propelling it back towards its all-time high.
On the flip side, an impending token unlock could pose a threat to Solana's upward momentum. Reports suggest that $489.2 million worth of coins are scheduled for release in February, potentially flooding the market with excess supply.
Token unlocks typically instill fear and uncertainty among investors, leading to a possible price dip if the influx of SOL is not met with sufficient demand.
As SOL currently trades at $231.53, experiencing a 9% decline in value over the past week, indicators like the Moving Average Convergence Divergence (MACD) signal weakening demand for the altcoin.
The bearish trend was confirmed when SOL's MACD line crossed below its signal line, signaling a potential extended decline due to higher selling activity compared to accumulation.
If this bearish scenario persists, SOL's price could plummet below $200 to around $187.71 in the coming weeks.
Nonetheless, a revival in demand sparked by another meme coin frenzy or the launch of SOL futures contracts could overturn this bearish outlook, sending SOL back to its all-time high and beyond.