For most of 2023 and 2024, Solana (SOL) spearheaded the crypto market’s resurgence, rallying from $8 to nearly $300. However, the token has since retraced significantly, currently trading below $130. This pullback has fueled speculation that Solana might be slipping back into bearish territory.
Solana’s Price Correction: A Cause for Concern?
Solana’s price recently dipped below $120 before recovering to $137, only to decline again to $128. Despite this volatility, technical indicators suggest that SOL may not be entering a prolonged downtrend just yet.
A key pattern emerging on the daily chart is the falling wedge—a bullish reversal signal characterized by descending trendlines indicating lower highs and lower lows. Historically, when price action breaks above this pattern’s resistance, it leads to a strong upside move.
Bullish Indicators Signal Possible Breakout
At present, SOL’s resistance stands at $135.35, with crucial support at $117.21. A notable bullish sign is the Moving Average Convergence Divergence (MACD) indicator returning to positive territory. If the 12-day EMA (blue) maintains its position above the 26-day EMA (orange), it could reinforce buying momentum and push SOL above its resistance.
Additionally, the Chaikin Money Flow (CMF) indicator, which tracks capital inflows and outflows, has risen to 0.02, indicating increased accumulation of SOL. This upward liquidity trend suggests that buyers are stepping in, reducing the likelihood of an extended decline.
Key Levels to Watch for SOL
If Solana successfully breaches the falling wedge’s upper boundary, it could reclaim the $160.60 level at the 0.618 Fibonacci retracement. A sustained rally could then see SOL targeting $178.89, with a potential push towards $186.15 if bullish momentum strengthens.
Conversely, failure to surpass $135.35 could lead to another correction toward $109.35. If selling pressure intensifies, SOL might even test the $77.91 support.
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While Solana’s correction has raised concerns, its technical indicators point toward a potential breakout rather than a prolonged downturn. Traders should monitor key resistance and support levels closely as SOL navigates this crucial phase in its market cycle.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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