(John Isige – FXStreet)
– Solana price is back at the optimum buy level in the wake of a 14.40% weekly cumulative loss.
– SOL eyes a 26.00% rally with the formation of a falling wedge pattern.
– Solana price must close the day above immediate support at $30.00 to validate the bulls’ quest to $38.55.
Solana price is embracing the return of stability several days after the cryptocurrency market flipped bearishly. The largest cryptocurrency, Bitcoin, plunged below $20,000 on Friday and pulled the entire market down with it. From support formed at $36.50, SOL price slipped and almost dispersed the buyer congestion at $30.00. However, a bullish outlook is back in play, with Solana price expected to make a stronger comeback.
Solana price is on the threshold and building recovery momentum.
Solana price hit extremely oversold conditions during its most recent fall to $30.00. This saw more capitulation as weak retail hands rushed to protect their capital. A combination of these two factors implies that SOL’s recovery is imminent. In other words, as the Stochastic RSI lifts from the oversold region, the competitive smart contracts token would reach higher levels like $38.50 and $48.50.
A falling wedge pattern formed on the eight-hour chart could be SOL’s ticket from the stubborn bearish shackles. This pattern develops during a sharp or extended drop where two trend lines are drawn, touching the asset’s lower lows and lower highs. Consolidation takes place at the wedge’s apex ahead of a significant breakout.
Traders must wait for Solana price to affirm movement above the upper trend line before going all-in for the 26.00% move to $38.50. Falling wedges are highly bullish patterns that often mark the transition from a downtrend to an uptrend. Therefore, SOL’s run-up to $38.50 could set the stage for a rally to $48.50.
Despite the above bullish outlook, investors do not seem convinced that Solana price is ready to roll down the runway and take off. Santiment’s Positive Sentiment on-chain metric reveals investor sentiment continues to decline three weeks after peaking at 2,802. Perhaps a catalyst from the ecosystem could reignite interest in the token and fashion Solana price with enough momentum to climb the ladder.
The expected run up to $38.50 might be stalled by several seller congestion zones at $34.50 and $36.50. Solana price will likely settle and consolidate in the narrow range between $30.00 and $34.00 if it lacks the extra boosts to bring down the cited resistance.