As the crypto market seemingly struggles to find a direction, with neither buyers nor sellers taking charge, the Solana (SOL) price has experienced a sideways trend for almost a month. Intriguingly, a closer examination of the 4-hour time frame reveals the formation of an inverted head and shoulder pattern. This pattern serves as a crucial pivot point for a trend reversal and presents a long entry opportunity for interested traders before a sizable rally.
One might recall that the Solana Price Prediction had suggested a possible 30% upswing if certain conditions were met. Well, with the formation of this pattern, the bullish breakout from the inverted H&S pattern might be setting the stage for a 12% jump in SOL price. Supporting this notion is the uptick in the ADX indicator, which, by now, stands at 20% and reflects the strength in buyers to initiate a significant upswing.
Further evidence comes from the 24-hour trading volume in Solana, which is at $250.5 million and marks a 59% gain. Today, after a 4% jump, the Solana coin price has had a massive breakout from the neckline resistance of the inverted H&S pattern. This breakout is also backed by rising volume, and follow-up green candles demonstrate the buyers’ determination to recoup lost ground.
As it stands, the Solana price trades at the $22 mark. However, market participants should prepare for a minor pullback wherein the coin retests the breached trendline. This potential retest will validate the buyers’ ability to maintain the higher levels. For potential buyers, the retest should also double as an entry opportunity, following which the price is expected to climb 12% to reach the $24 mark.
That said, the bullish thesis might be invalidated if the daily candle dips below the neckline resistance. The potential target for the inverted head and shoulder pattern, in theory, is the distance between the low of the head and the neckline, taken from the breakout point. Consequently, with sustained buying, the SOL price is likely to touch $24, encountering an intermediate obstacle at $23.
Analyzing several indicators, such as the DMI and EMA, lends further credence to a potentially positive trend sentiment for Solana. A massive divide between the DI+ and DI- slope indicates said sentiment in the DMI, while the recent growth in the EMA has enabled buyers to reclaim daily EMAs (20, 50, 100), providing additional support for the coin price to climb higher.
It is essential to note that the content herein contains the personal opinion of the author and one must always perform their market research before investing in cryptocurrencies. Neither the author nor the publication assumes any responsibility for any personal financial loss.
Source: Coingape
