Solana (SOL) appears to be gearing up for a potential rally. The cryptocurrency has formed a bullish price action pattern, catching the attention of both traders and notable investors. On-chain data from analytics firm Coinglass has highlighted key movements that suggest SOL might be on the verge of a significant price surge.

Bullish Market Momentum and Key Price Levels

In recent days, Solana saw a decline of over 25%, with its price dipping below $200. However, the price has recently stabilized and formed a bullish pattern on the four-hour timeframe. This technical setup has captured the attention of investors who see it as a signal that SOL might soon rebound sharply.

One of the key developments contributing to this optimistic outlook is the substantial movement of Solana tokens away from exchanges. According to on-chain data, exchanges experienced an outflow of more than $25 million worth of SOL tokens as the price approached the critical support level of $190. This large outflow indicates that investors are likely accumulating Solana, expecting future price increases. When tokens move off exchanges, it suggests that traders are holding assets in anticipation of a price surge rather than selling, which can create buying pressure and contribute to upward momentum.

At the time of writing, Solana is trading around $197, reflecting a 1.50% increase over the past 24 hours. While the price gains are modest at this stage, the pattern of steady increase could be a precursor to a larger rally. However, the drop in trading volume by approximately 40% during this period signals that market participation has been lower than in previous days, suggesting cautious sentiment among some investors.

Investor Sentiment: Long Positions Taking Over

According to Coinglass data, investors are betting more on a bullish scenario for Solana. Long positions on SOL are significantly outweighing short positions, with traders showing strong confidence that the price will not fall below the $188.80 level in the short term. Currently, long positions worth $90.50 million are held at the $188.80 price point, suggesting that investors are confident in Solana’s ability to maintain above this crucial support level. In comparison, short positions are considerably lower, with $33.70 million in short bets at the $197.50 level.

This large concentration of long positions further highlights the growing optimism around Solana. It suggests that traders are betting on further price increases, and should the price remain above key support levels, this optimism could drive additional momentum.

Key Technical Levels to Watch

Solana’s price action has recently approached a critical support level of $189, aligning with the 200 Exponential Moving Average (EMA) on the daily timeframe. The 200 EMA is widely regarded as a significant technical indicator, with its position acting as a marker for where prices are likely to move. If Solana can hold above this level, it could signal that the current bearish phase is over, paving the way for a potential breakout.

Additionally, SOL is encountering resistance at a descending trendline that has been in place since January 2024. If Solana can break above this trendline and close a four-hour candle above $200, it could trigger a 15% price surge, pushing the asset to a target of around $230 in the near future. This breakout could signal the start of a new bullish phase for Solana, attracting additional investors and increasing market activity.

Conclusion

While Solana’s price has faced recent challenges, the ongoing accumulation of tokens and bullish technical patterns suggest that the altcoin may be on the verge of a significant rebound. As large investors and traders bet on the long side, SOL is poised to break through key resistance levels and potentially rally to new highs. With increased investor interest and favorable technical indicators, Solana could be one to watch in the coming weeks.