The fourth-largest cryptocurrency, Solana (SOL), has received a lot of attention from the cryptocurrency community for breaking out of a bullish price action pattern. After the breakout, SOL is currently consolidating around the $210 support level, suggesting that accumulation may occur before a major rally begins.
Solana Technical Analysis
Currently, SOL has broken out of a nine-month-long parallel channel pattern, showing bullish momentum. Moreover, this breakout has shifted the market sentiment from range-bound to bullish.
However, the market has been consolidating in a tight range for the past three days, which suggests potential accumulation and portends a bullish outlook for SOL holders.
Based on recent price action and historical price momentum, if SOL breaks out of this minor consolidation, there is a high chance that it could surge 25% to $260 in the coming days. Currently, the asset is trading above the 200 exponential moving average (EMA) on the daily timeframe, indicating an uptrend.
On-chain indicators are bullish
Recently, Solana’s price has surged, breaking through the $200 threshold to reach a three-year high of $225.21. The surge in Solana’s value was driven by positive trends in the cryptocurrency market and increased demand for layer 1 blockchain networks.
SOL’s positive outlook is further supported by on-chain metrics. According to on-chain analytics firm Coinglass, Solana’s long/short ratio currently stands at 1.05, indicating that traders are strongly bullish on the market. Meanwhile, its open interest has surged 11% in the past 24 hours and 4.7% in the past 4 hours.
The increase in open interest indicates growing participation among traders as it looks to realize upward momentum, while the consolidation in prices also signals a bullish trend.
These on-chain indicators combined with technical analysis suggest that bulls remain in control of the asset amid price consolidation and could provide support for SOL in the upcoming bull run.
Where will the SOL price go next?
Solana recently broke through the $210 resistance level, giving bulls the upper hand. However, the price struggled to maintain momentum above $225, resulting in a slight correction below the 23.6% Fibonacci level. As of this writing, the SOL price is $214.2, up more than 2% in the past 24 hours despite the pullback.
Despite the efforts of the bears to sink the price below $200, the bulls have managed to maintain control, indicating an attempt to establish $210 as a new support. If successful, the SOL/USDT pair could climb to $225 and possibly $260.
As the RSI level is currently trading above the midline of 52, we might soon see a breakout above the $225 resistance level.
Conversely, if the bears hope to put a brake on this uptrend, they will have to quickly push the price below the 50-day moving average at $188. Doing so could trap overzealous bulls, triggering a wave of selling that could spark a drop to the critical support at $164.
In short, the crypto market has been consolidating over the past period of time, but bullish on-chain indicators and increased participation from traders and whales also indicate a bullish outlook. With the release of the CPI data, this catalyst has been generated, and the overall rise has been triggered again. It is expected that after confirming the breakthrough, Solana may rise by 25% to $260.
