Home Altcoins News Solana (SOL) Price Analysis: Bullish Trend Faces Temporary Setback, But Recovery Remains Probable

Solana (SOL) Price Analysis: Bullish Trend Faces Temporary Setback, But Recovery Remains Probable

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In recent times, Solana (SOL) has been a prominent name in the cryptocurrency space, with its rapid recovery capturing the attention of many investors. However, in the past fortnight, the 9th largest cryptocurrency experienced a sharp reversal from its resistance level at $32, resulting in a significant 27.9% drop, and the current trading price stands at $23.34. While this correction phase might raise concerns, it is backed by low-volume activity, indicating a temporary pullback as fewer market participants are currently interested in short positions.

A Look at the Daily Chart: Analyzing the daily chart, it becomes apparent that SOL’s price recently encountered a bearish breakout from a lower support trendline, raising concerns about a potential 13.5% further fall. However, there is a silver lining as several technical supports have accumulated near the $22.3 horizontal level, creating a strong demand zone. These support levels might serve as a solid foundation for a potential recovery in the near future.

The 24-hour trading volume for Solana stands at $484.5 million, indicating a 25% gain, which suggests that there is still significant interest in the coin despite the recent setback.

The Intriguing Pennant Formation: In the four-time frame chart, Solana’s price has formed a pennant pattern during the ongoing correction. This chart setup usually indicates a brief resting period for buyers before the bullish momentum resumes. However, there has been a slight intraday loss of 5.61%, with the sellers causing a bearish breakdown from the support trendline of the pennant.

The Bearish Signal: The bearish outcome from the bullish pennant pattern serves as a strong selling signal, suggesting that Solana’s price could be in for a more extended correction. Should the coin price manage to sustain below the breached support, the sellers would likely establish a new resistance level to exert pressure on buyers.

Potential Price Targets: The post-breakdown scenario could potentially push the price of SOL back to $22.5, followed by $20 and $18.5. However, it’s essential to keep in mind that the overall trend remains bullish, indicating that a recovery is still probable.

Probable Recovery Scenarios: With the bullish trend intact, Solana’s price is expected to resume its prior recovery once buyers find adequate support at a recently reclaimed level. According to the Fibonacci retracement level, the $22.3 horizontal level aligned with the 50% Fibonacci level, and the $20 level aligned with the 61.8% Fibonacci level, could act as solid springboards for a potential rebound. If these levels hold, it could signal the start of a bullish breakout of the overhead trendline, which may pave the way for a renewed uptrend.

Investor Sentiment and Potential Impact on the Market: As Solana garners attention and interest in the broader cryptocurrency market, its price movements can influence investor sentiment and bolster overall confidence in the blockchain space. Positive developments in projects like Solana that possess practical use cases and community-driven ecosystems can positively impact the entire industry.

In Conclusion: The recent sharp reversal in Solana’s price might have triggered caution among investors, but the underlying fundamentals as well as technical supports suggest that a recovery is probable. The bullish trend remains intact, and should buyers find solid support at crucial levels, the potential for a renewed uptrend is high. As the crypto community closely watches Solana’s performance, it remains evident that the project’s focus on innovation and resilience positions it for further possibilities in the ever-evolving world of blockchain technology.

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Pankaj K

Pankaj is a skilled engineer with a passion for cryptocurrencies and blockchain technology. With over five years of experience in digital marketing, Pankaj is also an avid investor and trader in the crypto sphere. As a devoted fan of the Klever ecosystem, he strongly advocates for its innovative solutions and user-friendly wallet, while continuing to appreciate the Cardano project. Like my work? Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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