Solana Price Forecast: Stakers Move 5M SOL after $11.3 Billion Rally, What Next?

Insights:

Solana (SOL) price rose 16.5% within the daily time-frame on April 23, adding $11.3 billion to its market capitalization in the process. On-chain data shows that Solana node validators are moving to book to early profits. 

Is Solana price on the verge of a parabolic breakout, or could the looming sell-wall derail the rally?

Solana Price Market Cap Grows $11.3 billion in 24-Hours

Solana emerged the best performing mega-cap asset in the top 10 crypto market rankings on Tuesday April 23, 2024. Solana’s blistering performance came as investors ignored volatility in the BTC and ETH prices to pile on bullish positions in the altcoin markets.

At the time of writing, Solana is exchanging hands $156, with a market capitalization of $68.5 billion, up 36.57% since the last local bottom recorded on April 12.

But after SOL added whopping $11.3 billion to its market cap during the latest 16.5% leg-up on Tuesday April 23, 2024, a curious pattern has emerged among Solana node validators’ staking trends that could put the price rally on hold.

Node Validators Un-stake 5 million SOL as Price Recovery Begins

Like every Proof of Stake (PoS) consensus project, Solana is network is secured by a decentralized stream of node validators who stake SOL coins in exchange for reward incentives.

As prices began to recover from the 40-day low of $116 recorded on April 13, Solana has witnessed a steep decline in its network staking balances.

The StakingRewards’ chart below presents real-time changes in total balance of SOL coins deposited in smart contracts.

When the Solana price dip bottomed out around April 15, the node validators held a total of 378.4 million SOL in staking contracts. But as prices began to rise, there has been a gradual decline in staking deposits, suggesting that some investors are moving to capitalize on the price surge to book early profits.

At the time of publication on April 24, the total stake has dropped to 374.4 million SOL. Essentially this implies that investors have un-staked 5 million SOL in the last 10-days.

When node validators begin to un-stake their coins during a price uptrend, it could be a precursor to an imminent correction for a number of reasons.

Firstly, with Solana currently trading at $156 per coin, the newly-unstaked coins are worth approximately $780 million. By flooding the markets with such a large volume of coins within a short-period, it dilutes supply on exchanges.

Without a commensurate surges in demand, Solana price could experience an initial correction phase in the days ahead before the next major breakout toward $200.

Solana (SOL) Price Forecast: Pullback toward $150?

Drawing insights from Solana node validators withdrawing $780 million SOL in the last 10-days, SOL price looks set for a short-term pullback towards $150.

Solana price has to close trading for the day above the $160 area, for the bulls to sustain the upward momentum. But the Bollinger band technical indicator suggest this could be a tall order considering the looming sell-wall at the 20-day SMA price level of $157.

With the $780 million worth of un-staked SOL flooding the markets, a large-scale sell-off at that key resistance zone could put Solana price at risk of a reversal towards the $150 territory in the days ahead.

But if the bulls can smash that sell-wall, an establish a steady support base above $160, another leg-up towards $200 could be on the cards.