Solana is almost 70% short of its November 2021 all-time high.
Now, the Layer 1 token appears to sit in oversold territory.
Slicing through the $88 resistance could result in an upswing to $120.
Share this article
Solana has not recovered the lost ground from its peak despite the bullish momentum seen in other Layer 1 tokens. Still, the technicals forecast that SOL’s trend could soon reverse to the upside.
Solana Prepares to Recover
Solana could finally be ready for an upward move.
The Layer 1 token is currently in a downward spiral, but several technical indicators suggest its trend might be improving.
After declining from its Nov. 6 peak, SOL is almost 70% short of its all-time high. That’s a stark contrast to other Layer 1 tokens such as Terra’s LUNA, which has shaken off rocky market conditions and broke a new all-time high Wednesday. SOL, meanwhile, is lagging. Still, there are a few reasons to believe that Solana’s corrective phase could soon reach exhaustion.
SOL’s price appears to be forming a bullish divergence against the Relative Strength Index on its daily chart. While it continues to make a series of lower lows, the RSI has been making a series of higher highs. Such market behavior indicates rising upward momentum, hinting that a break from oversold territory could be near.
Moreover, the recent downward price action appears to have led to the formation of a falling wedge on Solana’s daily chart. As SOL moves closer to the pattern’s apex, it could be preparing to break through resistance. A decisive close below the wedge’s upper trendline could result in a 34% upswing toward $120.
Given Solana’s poor performance over the past few months, it remains to be seen whether it will be able to gain the strength it needs to breakout. Breaching the $75 support level could show further signs of weakness, encouraging market participants to exit their positions. A spike in sell orders could invalidate the optimistic outlook and result in a steep correction to $54.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
OVR – the largest decentralized AR Metaverse
OVR is the decentralized infrastructure for the metaverse, merging physical and virtual world through Augmented Reality, creating a new dimension where everything is possible. It’s composed of 1.6 trillion unique hexagons…
Unlike Terra and Fantom, Solana and Binance DeFi Is Lagging
The total value locked in decentralized finance across Solana and BNB Chain has declined sharply over the course of last year. DeFi on other Layer 1 chains like Terra and…
Slope Finance Completed an $8m Series A Funding Led by Solana Venture
Slope Finance announces the close of an $8m Series A funding co-lead by Solana Venture and Jump Capital. Prominent VCs and major Exchanges include Sequoia China, Genesis Trading, CMS, Spark…
Solana, Fantom Hard Hit Amid Russia-Ukraine Fears
Spooked by the escalating tensions between Russia and Ukraine, the crypto market has continued to fall. Layer 1 coins have recorded outsized losses, with Solana, Avalanche, and Fantom dipping more…