The Solana (SOL) community has been closely monitoring the crypto’s price movements as it endures a relentless downward trend. Notably, this corrective phase has adhered to a distinct pattern, encapsulated within two converging trendlines, forming what technical analysts identify as a descending wedge formation.
Historically, such patterns have acted as precursors to substantial bullish surges upon breaking free from the upper resistance. The question that now lingers in the minds of crypto enthusiasts: Is Solana poised for a bullish turnaround, or should we brace for more market turbulence?
At present, Solana is trading at $17.86, according to CoinGecko data. Over the last 24 hours, it has witnessed a modest decline of 0.5%, contributing to a seven-day slump of 10.4%. The intriguing aspect is that SOL’s price currently hovers near the upper boundary of the descending wedge pattern, a crucial juncture where traders are grappling with substantial selling pressure.
This position implies that Solana may be poised to either break free from its recent struggles or face further rejection at this trendline resistance.
SOL seven-day price action. Source: Coingecko
Awaiting SOL’s Bullish Breakout
For those harboring bullish sentiments for SOL, a prudent approach may be to await a clear breach of the aforementioned resistance. If such an event occurs, it could trigger a rally pushing Solana toward a potential target of $22.21. Beyond that, the cryptocurrency might set its sights on even loftier goals, with price milestones at $25.43 and $32 becoming realistic objectives.
However, it’s essential to note that in the volatile world of cryptocurrency, the bearish sentiment can swiftly gain traction. In such a scenario, SOL could experience a further decline of approximately 11%, potentially targeting the $16.5 price region.
Solana market cap currently at $7.4 billion. Chart: TradingView.com
Solana’s Fundamentals Remain Strong
One trader, known as Altcoin Sherpa on the social media platform X, offers a perspective that combines long-term optimism with short-term caution. Altcoin Sherpa views Solana as a fundamentally robust crypto project poised to perform well during the next bull market.
$SOL: Big sell off yesterday, I didn’t catch any of it. Next point of interest is the $17-$15.50 area. Lots of scared investors in regards to a potential FTX holdings liquidation. #Solana https://t.co/7lfzea6XA7 pic.twitter.com/1f8XEJFlES
— Altcoin Sherpa (@AltcoinSherpa) September 10, 2023
Although the trader remains long-term bullish on SOL, the path to bull territory may not be a smooth one, Altcoin Sherpa implied:
“As a network, SOL is still a good one and will probably be a solid bet for the next bull run. I’ve got a long-term bag that I’ll just hold because I expect great multiples on it later on. But in the short term, it’s likely going to be painful.”
Solana’s price movement remains a focal point of interest in the cryptocurrency community. The descending wedge formation has set the stage for a potentially significant breakout or breakdown, and traders are advised to stay vigilant as the market dynamics unfold.
Whether Solana’s next move is bullish or bearish, the crypto world eagerly awaits to see where this innovative blockchain platform will steer its course.
(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).
Featured image from Morpheus Trading Group