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The Solana price was one of the few highlights in a generally choppy crypto market over the past week. While most large-cap assets were stuck in a consolidation range in the last seven-day period, the SOL token enjoyed a good amount of upward bullish momentum.
The price of SOL kicked off the weekend with a strong rally toward the $140 level, albeit facing some degree of resistance around this level. However, the latest on-chain data suggests that the Solana price might have become wedged between two crucial levels. Is SOL Price Gearing For A Breakout Or Breakdown?
In a recent post on the X platform, prominent crypto analyst Ali Martinez shared an on-chain insight into the current Solana price setup and its potential future trajectory. The online pundit referenced the “UTXO Realized Price Distribution” (URPD) indicator, which monitors the amount of a particular cryptocurrency that was acquired at a given level. Related Reading Bitcoin Dominance At Risk Of Crash To 40%, Why This Is Good For Ethereum, XRP, And Altcoins 1 day ago
Usually, the ability of a price level to serve as an on-chain support or resistance zone depends on the number of investors (and coins) with their cost basis around this level. The cost basis of an investor refers to the spot price at which they acquired their tokens or coins.
Typically, a price region (beneath the current price) where several investors bought their tokens will likely act as a support level. This is because investors are likely to double down on their position when an asset’s value falls to their cost basis; this buying activity helps keep the token’s price afloat.
On the other hand, price levels above the current price with significant buying activity would serve as major supply or resistance barriers. The rationale behind this is that investors tend to sell off their assets when the token’s price rises back to their cost basis, putting downward pressure on price and preventing further upward growth.
The chart below shows the distribution of token supply at different Solana price levels surrounding the current price. Source: @ali_charts on X
According to data from Glassnode, the most important support for the Solana price lies around $129, while the major resistance sits at around $144. As Martinez explained, a breakout (above $144) or breakdown (below $129) could determine the fate of the SOL token over the next few weeks.
As observed in the highlighted chart, the next significant support for the Solana price sits around the $10 level. Meanwhile, there is no significant resistance for the altcoin till around the $170 price level based on the URPD indicator. Solana Price At A Glance
As of this writing, the SOL token is valued at around $138, reflecting an over 3% price increase in the past 24 hours. Related Reading Cardano Whales Offload 180 Million ADA In 5 Days – Smart Profit-Taking? 1 day ago The price of SOL on the daily timeframe | Source: SOLUSDT chart on TradingView Featured image from Jakub Porzycki/Getty Images, chart from TradingView