Solana’s Falling Wedge Pattern: Recovery Rally or Extended Correction Ahead?

Cryptocurrency market scene, artistic representation of Solana coin, falling wedge pattern, sunrise at the horizon symbolizing potential recovery, light illuminating a bullish reversal, tints of blue and orange referencing MACD, hopeful and anticipatory mood, contrast between dark and light shades as price challenges resistance.

The Solana price recently rebounded from a $19.7 support level with a notable bullish reversal candle pattern, known as the tweezer bottom. Over the last four days, this reversal candle helped surge the price by 8.5%, moving towards the resistance trendline of a falling wedge pattern. The falling wedge pattern has played a significant role in prolonging Solana’s ongoing price correction, leading some enthusiasts to speculate whether the completion of the pattern might signal the start of a fresh recovery cycle.

If there is a bullish breakout from the pattern’s resistance trendline, traders may find an ideal entry opportunity in the market. Recent statistics show that the 24-hour trading volume in the Solana coin reached $250.7 million, indicating a 22.2% increase. This gain could suggest that a recovery rally for the altcoin may be approaching.

The falling wedge pattern is a well-known bullish reversal setup that is known for intensifying underlying buying pressure when the price moves beyond the overhead trendline. Since Solana’s price has experienced several rebounds on the support trendline throughout the month, it can be inferred that traders respect this pattern setup and may anticipate a price rally once the potential target is reached.

Currently, Solana sees an intraday gain of 1.77% and trades at $21.29, challenging the upper band of the falling wedge pattern. However, if the resistance remains in place, the price could experience a 10% drop towards the pattern’s lower trendline.

In contrast, a daily candle closing with a breakout from the resistance trendline would provide an opportunity for buyers to look for higher levels. If the bullish momentum continues, Solana’s price could rise to $24 or even $26.

Technical indicators such as the Moving Average Convergence/Divergence (MACD) show potential for an additional confirmation of a long opportunity with a bullish crossover between the MACD (blue) and the signal (orange). The daily Exponential Moving Averages (20, 50, and 100) gathered near the resistance trendline form a strong resistance zone. This suggests that Solana may face an extended correction period within the wedge before any significant bullish breakout occurs.

At an intraday level, Solana’s spot price stands at $21.3, featuring a bullish trend and medium volatility. The current resistance levels lie at $24 and $26, while the support levels are at $19.7 and $16. Investors should conduct thorough market research before entering any positions, as the author and the publication will not be responsible for personal financial losses that may arise.

Source: Coingape

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