Solana (SOL) has faced a series of market fluctuations recently, with its price testing crucial support levels. After experiencing a 2.55% drop on April 15, the altcoin is now retesting its breakout level at $124. Despite a bearish trend over the past week, some analysts believe that the coin could be poised for a strong recovery, potentially pushing prices back to $150. However, risks remain, with some predicting that a further decline could take the price down to $65.

Solana Price Analysis and Key Support Levels

Solana’s price action recently confirmed a bullish breakout of an inverted head-and-shoulders pattern on April 12. This breakout saw the price rise, peaking at $135 before encountering significant resistance. The upward momentum was quickly stifled, and the price began to retreat, forming long-wick candles indicative of bearish pressure.

The price found initial support at the 200 EMA (Exponential Moving Average) line, along with the 38.2% Fibonacci level at $128. Together, these factors established a bullish floor, which initially helped the coin to stabilize. However, a broader market pullback led Solana’s price to drop below the $128 mark, although it managed to maintain support above the 50 and 100 EMA lines.

Interestingly, Solana’s current price movement appears to be a retest of the inverted head-and-shoulders breakout near the neckline at $124. If the coin holds at this level, it could set the stage for a bullish reversal, driving the price higher. A successful retest followed by a rebound could see Solana climb toward the 50% Fibonacci retracement level, targeting a price point of around $150. This would represent an upside potential of nearly 20%.

Short-Term Outlook: Could SOL Reach $150?

The potential for a bounce back to $150 hinges on Solana’s ability to recover from the current pullback and continue its upward momentum. The recent bullish crossover between the 50 and 100 EMAs is a positive technical indicator, suggesting short-term bullish momentum. If the retest at $124 holds and the price manages to stay above key support levels, Solana could make a move toward $150.

On the other hand, a breakdown below $124 would bring the $116 support level into focus. If the price continues to fall, the psychological $100 mark could become a critical point of support. The outlook for Solana will depend heavily on whether it can maintain its current support levels or if the broader market downturn will drag it further down.

Solana’s Growing Network Activity

Despite the recent price decline, there is some positive news for Solana in terms of network activity. The number of active addresses on the Solana network has surged to 3.94 million, with monthly active wallets hitting a new all-time high of 68 million in March. This marks a notable increase in Solana’s ecosystem activity, which is a promising sign for the project’s long-term growth.

Solana’s monthly active wallets are significantly ahead of its competitors, including SUI, which only recorded 38 million active wallets in March. This growth in network activity underscores the increasing utility and demand for Solana, even amid the volatility in the broader crypto market.

Analyst Warning: Risk of a Drop to $65

Despite the network growth and potential for a bullish recovery, some analysts, like Ali Martinez, are cautioning against complacency. Martinez warns that Solana could be at risk of a correction. He has highlighted a possible breakdown of an ascending broadening pattern visible on the 3-day chart. If this scenario plays out, Martinez predicts that Solana could drop as low as $65.

While the broader market conditions and technical indicators suggest a potential rebound, the risk of a further decline cannot be ignored. Market volatility remains a significant factor, and Solana’s price could face downward pressure if negative trends persist.

Conclusion

In conclusion, Solana’s price is at a critical juncture. The retest of the $124 support level could lead to a bullish reversal, potentially pushing the price toward $150. The coin’s strong network activity and positive technical signals are encouraging signs for investors. However, there are risks to consider, including the possibility of a deeper correction, which could see Solana drop to $65. Traders and investors should keep a close eye on Solana’s price action and broader market trends to assess its next move.