Solana (SOL) Price Could Increase by 70%, but Only if It Clears This Resistance

The Solana (SOL) price could soon break out from its short-term pattern and make another attempt at breaking out from a long-term resistance line.

In Solana news, the volume of decentralized exchanges on the Solana protocol fell considerably from its Jan. highs. The main reason for this is waning interest in the Bonk (BONK) blockchain project, whose release caused a massive spike in interest last month.

Solana Price Gets Rejected

The daily chart technical analysis shows that the SOL token price has fallen below a descending resistance line since Aug. 2022. The line has caused two rejections (red icons), most recently on Jan. 29. The rejection began the current downward movement.

The drop was preceded by a bearish divergence in the RSI (green line). Moreover, the indicator is now below 50, a sign of a bearish trend.

Therefore, the trend is considered bearish unless the Solana price breaks out from the resistance line. A breakout could lead to an upward movement toward $37. This would be an increase of 70%, measuring from the current price.

SOL/USDT Daily Chart. Source: TradingView

Solana Price Breaks Down From Support

The short-term, six-hour chart shows that the SOL price broke down from an ascending support line on Jan. 30. Afterward, it validated it as resistance on Feb. 2 (red icon). The price has fallen since. 

Over the past three days, the SOL token price has traded slightly above the 0.382 Fib retracement support level. Additionally, the six-hour RSI has generated bullish divergence. Similarly to how the daily RSI initiated a drop, the six-hour one can initiate a bounce. 

Therefore, the SOL price may increase toward the resistance line once more. On the other hand, if it falls below $19.67, the digital currency could fall to $17.46.

SOL/USDT Six-Hour Chart. Source: TradingView

Where Will Correction End?

Finally, the price history from the two-hour chart shows that the SOL price is trading inside a descending parallel channel. Such channels usually contain corrective patterns, meaning that an eventual breakout from it would be expected.

The fact that the price is trading in the upper portion of the channel and the bullish divergence from the six-hour chart support this possibility.

Since the channel is close to the long-term resistance line, a breakout above it could also trigger a breakout from the line. In that case, the SOL price could increase to $37.

While the Solana price could fall to the support line once more, validating the 0.5 Fib retracement support level at $17.46, this would still not invalidate the bullish forecast. However, a breakdown from the channel would do so and could lead to a drop toward $9.

SOL/USDT Two-Hour Chart. Source: TradingView

To conclude, the most likely Solana price outlook is a breakout from the short-term channel and an attempt at breaking out from the long-term resistance line. On the other hand, a breakdown from the channel would invalidate this forecast and could lead to a significant fall toward $9.

For BeInCrypto’s latest crypto market analysis, click here.

Disclaimer

BeInCrypto strives to provide accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. You comply and understand that you should use any of this information at your own risk. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

Bookmark (0)

Related Posts

Ex-Coinbase CTO Claims US Dollar is No Longer Too Big to Fail, Touts Bitcoin

Coinbase former CTO Balaji Srinivasan said the US Dollar (USD) is not too big to fail.
Srinivasan expects Bitcoin (BTC) to replace it as the global reserve currency.
The US Dollar Index is down 8.9% in the last 6 months and has lost 1.34% of its value in the past year.

Bookmark (0)

Federal Reserve Slams Custodia Bank, Says it Endangers Crypto Industry and Itself

The Federal Reserves has detailed why it rejected Custodia’s bank application.
Custodia countered that its model prevents the kind of bank run that recently bedeviled the banking industry.
The bank further claimed the Feds statement showed its general bias against digital assets.

Bookmark (0)

Decentralized digital identities and credentials are key to mass Web3 adoption

As the world of Web3 emerges, decentralized digital identities present a promising alternative to the current.

Bookmark (0)

The Cayman Islands: A Safe Haven for Blockchain Companies?

Cayman Islands vs. Bahamas: How the FTX scandal impacted both jurisdictions.
The regulatory landscape and tax benefits of the Cayman Islands.
Importance of transparency and reputation in offshore financial services.

Bookmark (0)

What is fiscal policy, and why does it matter?

Fiscal policy shapes economies through government spending, taxation and borrowing.

Bookmark (0)

Litecoin (LTC) Retains Whale Interest Despite Recent Price Retracement, but Can It Reclaim $100?

Litecoin cleared $100 for the first time in 10 months before its recent correction.
Savvy whales have bought $280 million worth of tokens in the past month.
LTC average transaction size increased sevenfold in March.

Bookmark (0)

Leave a Reply

Your email address will not be published. Required fields are marked *