Solana price retreated this week as the crypto market dived. SOL token dropped to a low of $187, down from the weekend high. Still, its technicals and high staking yield points to more Solana gains.
Solana Price Technical Analysis
The daily timeframe chart shows that the SOL price has remained in a tight range in the past few days. On the positive side, the coin has formed an ascending triangle pattern.
This pattern comprises of a horizontal line, which in this case, is at $211 and a diagonal line. In this case, this diagonal line connects the lowest swings since April this year.
SOL price remains above the 50-day and 100-day Exponential Moving Averages (EMA), a sign that bulls are in control for now.
Therefore, the combination of the ascending triangle pattern and the moving averages points to more gain in the coming days. If this happens, the next key level to watch will be at $250, which is up by about 35% above the current level.
SOL price technical chart | Source: TradingView
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SOL Staking Yield as a Catalyst
One major catalyst for the Solana price is that it has a staking yield of about 7.5%, much higher than other top cryptocurrencies like Ethereum, Sui, and Hedera Hashgraph.
It has a staking market capitalization of over $75 billion, second only to Ethereum’s $152 billion. Its staking ratio is 66%, also higher than other cryptocurrencies. The benefit of this is that many holders are in it for the long term.
Therefore, if the Solana price crashes by 10% in a year, its 7.5% staking yield means that the total return is minus 2.5%. In contrast, if Ethereum price drops by 10% a year, its total return will be minus 7.5% as it has a smaller staking yield.
Solana price has other potential catalysts that will push it higher in the long term. It is the second-biggest chain after Ethereum in top industries like Decentralized Finance (DeFi), Non-Fungible Tokens (NFT), and stablecoins.
Further, Solana is the second most applied altcoin ETF, and the odds of its approval have jumped in the past few months. As such, there is a likelihood that these funds will have substantial inflows. Indeed, the recently launched SSK Staking ETF has already received millions of dollars in assets.
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