Solana price heads to $110 after being extremely oversold

• Solana price completes 50% retracement from the 2021 rally.
• Strong support was found near the $90 value area. 
• Extreme oversold conditions indicate a pullback in the form of a relief rally is imminent. 

Solana price, like the majority of the cryptocurrency market, has experienced significant loss. SOL is down 69% from the all-time high, but a sizeable retracement of that loss is coming up.

Solana price poised to test resistance at $110

Solana price has lost nearly 45% from last week's open, moving from $146 to the current weekly low at $80. However, a significant amount of buying support poured into SOL near the 50% Fibonacci retracement at $91 and since hitting that Fibonacci zone, buyers have been in control and maintaining a steady rise over the past two trading days. 

It is very likely that a significant swing low for Solana price has been established – one that will be a launching point for another run towards new all-time highs. The Relative Strength Index is oversold on the weekly and daily charts. Likewise, the Composite Index oscillator has hit new all-time lows on the weekly chart, while the daily Composite Index created the second-lowest low in its history.

Another factor adding to the probability of a broader bullish reversal is the current weekly candlestick pattern. A Bullish Hammer candlestick pattern is one of the most sought-after bullish reversal patterns in Japanese analysis. Given the extreme oversold nature of Solana price and the length of its current downtrend, if the bullish hammer pattern completes on the weekly chart, then SOL is poised for some nice gains ahead. 

SOL/USDT Weekly Ichimoku Kinko Hyo Chart

Before any sustained rally can be triggered and maintained, however, a series of resistance levels will be tested. The first is at the $110 value area, which contains a cluster of prior Fibonacci confluence zones (thick black line) and a high volume node in the Volume Profile. If bulls can push Solana price and hold it above $110, then the road to retest $150 becomes more manageable. 

Any weekly close below the 50% Fibonacci level at $91 would invalidate any near-term bullish bias. 
 

 

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