Solana (SOL), one of the fastest-growing Layer 1 blockchain projects, is showing signs of renewed strength as the cryptocurrency recovers above the $170 level. With a bullish chart pattern forming and positive sentiment building in the futures market, investors and analysts are turning optimistic about a potential rally toward $262.

Solana has experienced a minor bounce this week, trading up 1.75% at $172 after falling 7% in the previous two days. While short-term volatility has gripped the broader crypto market, SOL’s technical indicators suggest that a larger upward move may be forming.

Rounding Bottom Formation Points to Recovery

The current chart pattern for Solana resembles a classic rounding bottom — a bullish reversal structure that often precedes extended price surges. This pattern began forming after SOL declined sharply from $262 to a low of $105 between January and early April, losing nearly 60% of its value.

Since then, Solana has rebounded strongly, climbing more than 64% in the last 34 days. Now, the asset is approaching the $183 level, which represents both the 50% Fibonacci retracement of the prior correction and the neckline of the rounding bottom. A successful breakout above this point could open the door for a continued rally toward the $262 level — the previous high and a significant psychological milestone.

Technical Indicators Support Bullish Momentum

Multiple technical indicators are reinforcing the bullish case. The Relative Strength Index (RSI), a key momentum gauge, has started to move upward after briefly dipping below its 14-day simple moving average. This suggests that buyers are regaining control and that bullish momentum is building once again.

The 50-day and 100-day exponential moving averages (EMAs) are also converging, hinting at a potential bullish crossover. If confirmed, this crossover could act as a fresh buy signal for traders and institutional investors monitoring momentum-based setups.

Cup and Handle Pattern Identified on Weekly Chart

Crypto analyst Ali Martinez has added to the growing optimism by identifying a cup and handle pattern forming on Solana’s weekly chart. This technical structure, often seen in bullish market setups, indicates a brief consolidation before a larger breakout. The “handle” portion is forming as a descending channel, with resistance located near the $200 level.

Martinez believes that if Solana can close above this resistance, it could ignite a parabolic rally, potentially pushing the price beyond the $262 target. This aligns with the larger bullish reversal structure seen on the daily timeframe, offering additional confirmation.

Futures Market Shows Confidence in Solana

Solana’s strength isn’t just limited to spot market action. Derivatives data shows increasing confidence among traders. According to Coinglass, open interest in Solana futures has risen to $6.83 billion. This indicates a significant amount of capital is being placed on future SOL price movements.

Additionally, the funding rate remains positive at 0.0023%, signaling that long positions are dominant. On Binance, 70.45% of SOLUSDT traders are currently holding long positions. The total long-to-short ratio stands at 2.38, reflecting a clear bullish bias among leveraged traders.

Key Resistance Levels to Watch

For Solana to confirm its bullish breakout, it must clear two critical resistance levels: $183 and $200. The former is tied to the rounding bottom pattern, while the latter is the neckline of the handle formation. If SOL can push through these zones, momentum could drive it to retest the $262 level — its previous 2024 high.

On the downside, any failure to hold current support levels could lead to a retest of the 200-day EMA, near $150. However, unless market sentiment significantly weakens, the broader outlook for Solana remains positive.

Conclusion

Solana appears well-positioned for a potential breakout, with strong support from both technical patterns and futures market data. If the bullish momentum holds and key resistance levels are broken, SOL could be on its way to reclaiming the $262 mark — and possibly charting new highs in the months ahead.