The world of cryptocurrency has recently witnessed a tidy tangle in the form of Solana (SOL), a high-speed blockchain, as it wrestled with the market’s potent volatility. While the impressive rally it exhibited earlier in 2024 was cause for excitement, SOL has unfortunately experienced a 13% dip in the past week that has left investors in a state of uncertainty about what the future may hold.
However, there might be reason for optimism. Technical analyst, Patel, believes he has traced the future trajectory for SOL by identifying a pattern within its market behavior. His findings pointed out a classic “Cup and Handle” pattern in the weekly SOL/USDT chart. This bullish indicator resembles a cup with its handle and is characterized by a period of significant growth (the cup), a small downturn, and then a period of consolidation (the handle) which could signal a bullish resurgence.
According to Patel’s analysis, the rise and subsequent fall of Solana charted from mid-2021 to mid-2022 comprise the “cup”. Meanwhile, the current consolidation phase or the “handle” represents a period where the price stabilizes after the initial rapid movement.
SOL bulls face the formidable challenge of overcoming the resistance zone, hemmed between $200-$225. Historically, this has acted as a hindrance, a psychological barrier that once breached, could herald the onset of a bullish recovery.
Still, Patel’s analysis dares to tread beyond immediate resistances, outlining ambitious price targets for SOL’s medium to long-term journey. His first target postulates a revisit to previous highs at $520, signifying a considerable upswing. However, he doesn’t stop here. Unexpectedly, Patel’s second target is a dizzying $1,042, an overtly optimistic long-term view. Albeit the realization of such targets would be contingent on SOL successfully completing the handle formation of the pattern.
This possible sequence of events might necessitate a consolidation phase and a potential pullback. An ordeal that might seem unpleasant in the short run, but is necessary to garner the momentum needed for powerful breakouts.
Bouncing back to the present reality, the short-term projections for SOL seem to be shrouded in clouds of uncertainty. Market indications signal a bearish tendency, as Solana is currently trading below its 100-day Simple Moving Average (SMA). Serving to amplify this bearish aspect is the Relative Strength Index (RSI) which is fluttering below 50%, nearing the oversold territory.
In its immediate future, SOL may grapple with the possibility of a downside scenario. Certain analysts speculate a descent toward the $118 support level, with some predicting an even steeper fall toward $99. Nonetheless, the prospect of a reversal remains. Given the tide turns, SOL could potentially defy the bearish trend and surge past the $140 resistance level, setting its sights on grander targets such as $160 and $188.
Patel’s strategic roadmap serves to guide SOL investors, offering assistance and insight in their navigation through the unpredictable seas of the cryptocurrency market. Despite the looming threat of short-term turbulence, the long-term forecast for SOL remains cautiously positive. This bullish outlook, however, relies heavily on SOL’s ability to penetrate crucial resistance levels and maintain its upward momentum.
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