Solana (SOL), one of the top cryptocurrencies, is showing signs of a potential breakout after days of trading in a narrow range. Investors and traders are closely monitoring its next move as it could significantly impact the market. Solana’s price has been bouncing between two important levels, and experts believe it’s only a matter of time before the cryptocurrency breaks out, either to the upside or downside.

Currently, Solana is trading between $143.33 and $144.70, which has kept traders on edge. The lack of a clear direction has created an air of uncertainty, but many believe this calm won’t last much longer. The market is waiting for a decisive move, and whichever way Solana goes could shape its price trend in the coming days.

Why Solana’s Consolidation Phase Matters

In the world of cryptocurrency trading, periods of sideways movement—where prices stay within a tight range—are often seen as consolidation phases. These phases typically happen when the market is undecided about the next direction. For Solana, the current consolidation has lasted long enough that many are predicting an imminent breakout.

Analysts explain that Solana’s price action is a result of it testing both support and resistance levels within this narrow range. These levels represent psychological barriers in the market: support is the price at which traders believe the asset has enough value to stop falling, while resistance is where they believe the price is too high, causing selling pressure. If Solana manages to break past these levels, it could signal a new price trend.

Key Levels to Watch: $150.54 and $137.25

Edward, a well-known market analyst, pointed out that Solana is currently trading below two key exponential moving averages (EMAs)—the 34-period and 89-period EMAs. These technical indicators help traders understand the momentum of the market. Being below these EMAs suggests that Solana’s short-term trend is leaning slightly bearish.

However, if Solana can break above its resistance level of $144.70, it might move toward the next significant target of $150.54. This could renewed interest in the cryptocurrency and trigger further buying activity.

On the other hand, if Solana falls below its support level of $143.33, it may decline further, potentially testing the $137.25 level. This lower level will act as a crucial support zone, and traders will be paying close attention to see if Solana can hold at this price.

External Factors Could Drive Solana Higher

While the technical aspects of Solana’s price action provide a clear view of potential outcomes, external factors also play a major role. One of the biggest influences could be the 2024 U.S. presidential election. Geoff Kendrick, an analyst at Standard Chartered, believes Solana could experience a dramatic rise if Donald Trump wins the election. According to Kendrick, Trump’s victory could bring a more crypto-friendly regulatory environment, which might benefit cryptocurrencies like Solana.

Kendrick even predicts that Solana’s price could increase by 500% if Trump wins, thanks to the anticipation of supportive policies for the crypto sector. In particular, the approval of a Solana exchange-traded fund (ETF) could significantly boost demand and drive prices higher. An ETF approval would allow institutional investors to gain exposure to Solana, increasing its overall market liquidity.

Market Sentiment Could Fuel a Rebound

Adding another layer of complexity to Solana’s situation is the negative market sentiment that has been hanging over the cryptocurrency. According to Santiment, a platform that tracks market intelligence, Solana is currently facing bearish sentiment from the broader crypto community. Historically, however, when the market has a negative view on an asset, prices tend to reverse and climb once sentiment improves.

Santiment’s data shows that Solana is experiencing a weighted sentiment score of -0.400815, indicating that the majority of traders and investors are not optimistic about its short-term prospects. However, as history suggests, these bearish periods often pave the way for future price recoveries.

What Traders Should Expect Next

As Solana remains in this consolidation phase, traders and investors are left to speculate on what will happen next. The cryptocurrency has been trapped in a tight range, but a breakout appears to be looming. Analysts are urging caution, as the next major move could determine the direction of Solana for the remainder of 2024.

For now, $144.70 is the resistance level to watch, with a potential move toward $150.54 if Solana can break above it. Alternatively, if Solana fails to hold $143.33, a dip to $137.25 could be in the cards.

Market sentiment and external events, like political developments and the possible approval of a Solana ETF, could add fuel to the fire, driving Solana’s price in unexpected directions. As always, cryptocurrency markets remain unpredictable, and traders should keep a close eye on the latest developments.