SOL’s interim upside target is near $47, up about 20% from its current price.
Solana (SOL) continued its recovery trend on June 28 while inching closer to triggering a classic bullish reversal setup.
SOL’s price gained 2.42%, reaching an intraday high of $39.40/ The SOL/USD pair is now up 50% as a part of a broader retracement move that began on June 14 after falling to lows of $26.
SOL/USD daily price chart. Source: TradingView
Solana price eyes 75% rally
The latest buying period in the Solana market has been painting what appears to be an “inverse head and shoulders pattern (IH&S)” pattern.
The bullish reversal setup appears when the price forms three troughs in a row below a common support trendline called “neckline.” The middle trough, known as “head,” is always deeper than the other two troughs, called shoulders.
An IH&S setup resolves after the price breaks above the neckline level. Also, as a rule of technical analysis, the pattern’s profit target comes to be at length equal to the maximum distance between the head’s lowest tip and the neckline.
SOL/USD daily price chart featuring IH&S pattern. Source: TradingView
Suppose SOL breaks above its neckline resistance of $41.50. Then, the chances of continuing the bullish retracement stand around 83.5%, with its upside target sitting at over $68, about 75% above today’s price.
Interim resistance levels
Solana’s road to $68 could face hurdles in a confluence of technical resistance levels, including its 50-day exponential moving average (50-day EMA; the red wave) and a support-turned-resistance line. Both resistance levels are around $47.
SOL remains at risk of exhausting its IH&S breakout, which, in turn, could trigger a “bear flag” setup. A pullback from the $47-resistance-level, coinciding with the flag’s upper trendline, could lead to a breakdown, as shown in the chart below.
SOL/USD daily price chart featuring ‘bear flag’ pattern. Source: TradingView
As a result, SOL’s downside target comes to be approximately inside the $23-$30 range, depending on its breakdown point.
In a similar setup, independent market analyst PostyXBT anticipated SOL’s price to reach $47.
– Higher low & S/R flip
– $BTC still hasn’t pushed higher to $23k
– Play the short term trend until invalidated
– Declining volume a concern
Not rushing into an entry at current price. If I don’t get filled slightly lower, so be it. pic.twitter.com/IgZbeBAq40
Nonetheless, declining volumes remain a concern, so traders should play the short-term trend until further bullish confirmation, he added. In other words, SOL’s likelihood of returning lower is high after reaching $47.
Solana also down 85% from pe
Like most crypto assets, Solana has lost a significant chunk of its valuation compared to its November 2021 peak, down over 85% now.
Additionally, Solana’s “decentralization” has also faced increasing scrutiny amid repeated network outages and a recent attempt to take control of a whale’s wallet via community voting to force liquidation.
Absolute comedy. @solendprotocol, a supposed “decentralized” lending protocol built on Solana has “voted” to take over a whales account with emergency powers to eliminate the chance of forced liquidation.
“Decentralized” in name only. pic.twitter.com/Vrua3dFoES
On the other hand, some anticipate Solana’s ecosystem to grow just like its top rival Ethereum did after the 2018 bear market. That includes Spencer Noon, the co-founder of crypto-focused Variant Fund, who said:
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