The Solana price is close to showing a significant change in direction, influenced by a pattern called a cup and handle.
During the ongoing relief rally in the cryptocurrency market, Solana has displayed notable strength, holding above the crucial $80 mark. This surge in buying activity has driven the altcoin’s value up by 23% within a week, now trading at $97.3. This article will delve into the factors contributing to this recovery and the potential for a significant turnaround in the near future.
SOL Price Reversal and Market Analysis
The recent reversal in SOL price from the 38.2% Fibonacci retracement level suggests that the previous correction helped buyers regain bullish momentum. Additionally, the rising 100 and 200-day Exponential Moving Averages (EMA) indicate a continued bullish trend in the long term.
The 24-hour trading volume for Solana coin stands at $2.1 billion, marking a notable 60% gain. Despite broader market challenges, including concerns over the Bitcoin ETF, Solana experienced a significant correction, dropping from $126 to a recent low of $79. However, it found strong support around the $80 mark and the 38.2% Fibonacci retracement level.
Bullish Momentum and Resistance Levels
With the cryptocurrency market displaying signs of recovery, especially with Bitcoin surpassing $42,000, SOL coin bounced back from the aforementioned support levels. If the current bullish trend continues, buyers are likely to target immediate resistance at $102, corresponding to the 50% Fibonacci retracement level.
Breaking through this resistance could drive SOL price higher, potentially reaching the $126 level once again. Analysis of the daily time frame chart suggests that such a rally could complete a “Cup and Handle” pattern, a bullish reversal pattern often observed at the end of major bear markets. This indicates a significant trend reversal potential for Solana.
Long-Term Bullish Outlook with “Cup and Handle” Pattern
The formation of the “Cup and Handle” pattern on Solana’s chart over nearly two years suggests a potentially significant bullish impact on its price in the long term. A breakout above the neckline resistance at $126 could serve as an early indication of a trend reversal, signaling the asset’s emergence from a crucial accumulation phase. With sustained buying pressure, the post-breakout rally may target an initial level around $256.
The recent upward movement above the 20 and 50-day Exponential Moving Averages (EMA) indicates a return of the recovery trend to SOL price. This development suggests a positive momentum in the market sentiment.
A potential bullish crossover between the DI+ and DI- in the Directional Moving Index could further accelerate the bullish momentum in the market. This indicates a shift towards more positive market sentiment and a potential increase in buying activity.
Important:Ā Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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