Key Takeaways
- Despite the Solana dip, the daily chart reveals a cup-and-handle pattern, suggesting a possible reversal.
- On-chain data shows a consistent negative exchange net position change, meaning low selling pressure.
- On the 4-hour chart, the 12 EMA has crossed above the 26 EMA, indicating that SOL could break $159.17.
Solana (SOL) delivered a harsh setback to holders last week, plunging to $150 after a 13% decline over the past seven days.
The drop pushed SOL’s market value to its lowest since early May, indicating renewed bearish pressure on the altcoin.
Yet, glancing at the charts shows that this correction is unlikely to last long. In this analysis, CCN reveals the key levels to watch for a potential recovery.
Solana Forms Cup and Handle
Between February and May, Solana’s price appeared to be carving out a U-shaped recovery, aiming for a move back toward $200. However, the bullish momentum faltered in the final week of May, with the price slipping into a descending channel.
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Interestingly, this pullback and the earlier recovery have formed a cup-and-handle pattern on the daily chart. This bullish reversal pattern can last weeks to months if the price breaks above the resistance.
The key resistance level for Solana’s price is $183.63. However, to make such a move, bulls must first defend the immediate support at $144.30.
If validated, the rising Relative Strength Index (RSI) reading could help drive SOL’s price toward $238.09 in the mid-term.
Selling Pressure Fades
On-chain data also seems to support this thesis. According to Glassnode, Solana has been experiencing central outflow from exchanges.
As seen below, the exchange net position change is in the negative territory. This implies that most holders have taken their SOL off exchanges for over 30 days, indicating low selling pressure.
If sustained, then Solana’s price might defy another correction. Instead, the altcoin might break above key resistance levels as mentioned earlier.
SOL Price Analysis: Bullish Reversal
The 4-hour SOL/USD chart, like the signs on the daily timeframe, further reinforces the bullish outlook. The Moving Average Convergence Divergence (MACD) currently holds positive territory, indicating growing bullish momentum around Solana.
Additionally, the 12-period Exponential Moving Average (EMA) has crossed above the 26 EMA, suggesting SOL may be ready to recover its recent 13% loss.
Supporting this thesis, the Parabolic SAR dots are positioned below the current price, signaling strong underlying support.
If this structure holds, SOL could break above the immediate resistance at $159.17 and potentially climb to $170 in the short term.
However, if the altcoin fails to maintain support at $150, the bullish setup may be invalidated, with a possible retracement to $141.55.
This decline might be worse in a highly bearish scenario, and SOL’s price might slide to $120.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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