Solana bulls experience yet another drop after the market-wide sell-off within the past month. The southbound trajectory had SOL at levels never seen in more than nine months as it hit $35. As the alternative token maintains its squeeze within the falling wedge, the coming few candlesticks would remain critical to gauge breakout rallies.
A closing above the pattern would unveil near-term ‘buy’ opportunities, as long as bulls support increased buying volumes. While publishing this blog, Solana traded near $39.27, following a 6.23% drop over the past 24 hours.
Solana Daily Timeframe
Solana’s failure to keep the $85 mark catalyzed bearish actions that translated to a 62.5% weekly plunge from May 5 to May 12. As a result, the alt pulled back towards 9-month lows on May 12. The alternative token has plummeted within a falling wedge amid heightened selling momentum, approaching the 10-month support near $38.
A possible rebound plus the reversal setup might offer bulls the much-required determination to break beyond the wedge. An upside breakout often follows a falling wedge formation. Nevertheless, the plunging volume trend might favor bearishness within the upcoming sessions. Moreover, Bollinger Bands’ basis line remained south, confirming a bearish regime.
A closing past the wedge would see the alternative token testing the BB’s basis line. The bulls have not secured a close past the basis line for about two months. Meanwhile, any closing past this line might mean an entry trigger. That would set the profit-booking level near $50 – $52. However, buyers dwindling would see retracements that might catalyze a downside breakout to explore $32 – $34 before possible bullish comebacks.
Solana might be ready for a revival as the Relative Strength Index retain an oversold picture, provided buyers maintain their immediate footings. While writing this content, the indicator saw a slight uptick following a bullish divergence with SOL prices last week.
Furthermore, Chaikin Money Flow’s higher troughs confirmed a bullish divergence with Solana’s price last week. Nevertheless, the Aroon up lurked around 7%. Investors should refrain from placing calls until the Aroon index record a massive northbound revival.
Solana’s reversal setup plus bullish divergences by its indicators might mean eased selling momentum within the coming sessions. SOL investors should wait for closing beyond the BB’s basis line and Aroon indicator improvement before calls’ execution. Meanwhile, bullish invalidation will see bears securing bounce-back grounds at $32 – $34.
Editorial credit: davide bonaldo / shutterstock.com