After falling to its lowest level since February 2021, Solana (SOL), the cryptocurrency once supported by Sam Bankman-Fried, pared some losses on Dec. 30.
The price of solana has dropped 97% from its peak in November 2021
The price of SOL rebounded to around $10.25 from its previous day’s low of approximately $8 on the daily chart.
Despite the intraday recovery, the overall bear trend continued – down 97% from its record peak of $267.50 in November 2021, and down over 20% in the past week.
In spite of the brutal year for markets, Solana now ranks among the worst-performing tokens of 2022, along with FTX Token and LUNA.
SOL price could recover 50%.
Nevertheless, the recent rebound in Solana prices suggests more upside in 2023.
On Dec. 29, SOL appeared to have formed what appeared to be a standard Doji – a candlestick pattern formed when an asset opens and closes at the same level.
Traditionally, analysts consider a Doji candlestick pattern as a potential reversal candlestick pattern, as it indicates that bulls and bears are at a stalemate. Therefore, a Doji formation during a long uptrend period could signal a bearish reversal in the making, and vice versa.
On the daily chart below, SOL’s Doji appears after a long downtrend period. This, coupled with the token’s oversold (relative strength index reading, suggests an extended bullish reversal may occur in 2023.
SOL’s primary upside target looks to be around $15, up 50% from current levels. The $15 level has served as resistance since Nov. 13, 2022.
Defeating negative fundamentals
A year-to-date loss of approximately 97% for Solana has made it one of 2022’s worst-performing cryptocurrencies, while the total cryptocurrency market cap has declined only 65%.
A hawkish Fed, Solana’s frequent downtimes, a $200 million hack on one of its associated wallets, and possible FTX exposure may explain SOL’s underperformance in 2022.
In December, Anatoly Yakovenko, the co-founder of Solana Labs Inc., clarified that nearly 80% of projects on Solana’s blockchain had no connection to FTX.
Every investment and trading move involves risk, and readers should conduct their own research before making a decision.