Solana (SOL) hit a new yearly high of $68.20 but then retreated and is now trading slightly below the critical $62.50 resistance area. Should I Expect a Bullish Breakout or Bounce?
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Solana formed five bullish candles in a row
Since the beginning of October, the price of SOL has been rising aggressively. At that time, the coin broke through the descending resistance line and confirmed it as support (green icon).
During the rise, Solana broke through the resistance areas of $27 and 50. Last week, the price reached a new yearly high of $68.20. This was the highest price since April 2022.
The RSI momentum indicator is rising and is above the neutral level of 50, which is a positive signal. Although the index is overbought, it has not yet formed a bearish divergence. Additionally, its current value of 80 is well below its all-time high of 99.
Read more, what is Solana (SOL): overview of the project and its prospects
What analysts say
Cryptanalysts at social platform X are optimistic about Solana’s future. Thus, Bluntz Capital believes that, according to the Elliott wave theory, the price will rise rapidly.
https://twitter.com/CryptoGodJohn/status/1726310745158332544?s=20 And https://twitter.com/rektcapital/status/1726199483879346257 also believe in the growth of the coin, although both use horizontal price levels for this. Overall, all three traders believe that SOL will rise to a new yearly high.
Read also: Cathie Wood praised Solana (SOL), the asset price increased by 20%
SOL forecast: pullback or continued growth
Unlike the bullish weekly chart, the shorter six-hour time frame suggests that a correction may occur first before the altcoin eventually resumes its rise.
The reason for this lies in price dynamics. The chart shows that SOL deviated above the $62.50 resistance area and then tested it again.
The price movement resembles a technical head and shoulders (H&S) pattern, which is considered bearish. In any case, the viability of this model has not yet been confirmed.
This will only happen if Solana breaks below the $60 neckline. In this case, the price is expected to fall by 25% to the nearest support of $45.
On the downside, a recovery above the $62.50 area would invalidate the H&S pattern and lead to at least a 25% rally to the next resistance at $76.80.
Thus, the further forecast of SOL depends on the price behavior in the resistance area of $62.50. Depending on whether we see a rebound or a breakout, the price could either rise or fall by 25%.
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