As the cryptocurrency market shows signs of recovery, Solana (SOL) is setting up for a potential breakout. Its daily chart reveals a bullish price pattern, hinting at a significant upside move. After a recent 15% decline, SOL has found strong support at its 200-day Exponential Moving Average (EMA), positioning itself for a rebound.
Want to know what’s driving this bullish outlook? Keep reading!
Technical analysis points to a bullish setup for SOL, as it’s forming an inverted head-and-shoulders pattern—a classic indicator of a trend reversal. So far, SOL has one head and one shoulder in place, with the second shoulder potentially forming. To complete the pattern, SOL needs to rally 15%, reaching the $165 mark in the coming days.
If the pattern completes and SOL breaks out, a further 20% surge could push the price to $200, supported by a bullish market sentiment. Notably, the Relative Strength Index (RSI) suggests the asset is oversold, signaling a possible reversal from its recent downtrend.
At the time of writing, SOL is trading at $144.10, gaining 5.75% in the last 24 hours. However, traders and investors remain cautious due to the recent price drop. This hesitation is reflected in a 20% decline in trading volume during the same period.
Solana’s positive outlook is further supported by on-chain metrics. According to the on-chain analytics firm Coinglass, SOL’s Long/Short ratio currently stands at 1.021, indicating bullish market sentiment among traders. When the Long/Short ratio is above 1, it suggests more traders are betting on price increases.
Moreover, SOL’s open interest has risen by 3.8% over the past 24 hours, indicating strong market momentum. When both price and open interest rise together, it suggests growing bullish confidence. Conversely, if open interest declines as the price rises, it may signal waning conviction in the rally.
What’s Next for Solana?
With a combination of bullish price patterns and supportive on-chain metrics, SOL appears to be in a strong upward trend. For now, the bulls are firmly in control, and Solana’s price could continue to climb if current momentum holds.
Will Solana (SOL) break the $200 barrier? Stay tuned to Coinpedia to find out!
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