• Solana price flashes potential bear trap after breaking down from a multi-week rising wedge pattern.
  • SOL may close today with a bullish engulfing 12-hour bar.
  • 61.8% Fibonacci retracement level of the May correction offering active resistance since June 4.

Solana price has been climbing higher, illustrating a rising wedge pattern that broke to the downside today as the cryptocurrency complex turned red. SOL has quickly recovered and is at the top of the leader board with a 9% gain, suggesting it is readying to continue the quest to the all-time high.

Solana price cheats bearish market dynamics

Over five days, Solana price collapsed over 67%, locating a firm low on May 23. It recorded the largest weekly decline at almost 48% and the largest correction for the tremendous rally since December 2020. By yesterday’s high, SOL had rebounded by 130% and was placed around the tactically important 50-day simple moving average (SMA) at $39.54.

The persistent SOL rebound broke with the pattern displayed by other cryptocurrencies, most often highlighted by sharp one-day bounces but within the limits of an ascending or symmetrical triangle. 

Solana price illuminated a rising wedge pattern that was nearing the apex during the steadfast rise as of yesterday. Today’s break below the wedge’s lower trend line triggered investors to fold their positions and capture profits. However, SOL has strongly rebounded and recovered the wedge’s lower trend line and the 50-day SMA, provoking a potential bear trap. It is an example of when daily closes can be tactically advantageous.

In general, a rising wedge is a bearish pattern that begins wide at the bottom and slowly contracts as the price moves higher. It can be a continuation pattern or a reversal pattern and is underlined by weakening volume.

If today’s rebound holds, it raises the probability that Solana price will resume the uptrend as more weak holders have now been flushed from the SOL investor base. The 61.8% retracement level at $43.00 and the 78.6% retracement level at $49.50 block the path to the all-time high at $58.39.

Additional targets will be more apparent once Solana price has reached the all-time high.

SOL/USD daily chart

SOL/USD daily chart

A daily close below the 50-day SMA and the wedge’s lower trendline will re-introduce a bearish bias. Solana price support layers are the 38.2% retracement of the rally off the May low at $34.62, followed by the 50% retracement at $31.66 and lastly, the 61.8% retracement at $28.69.

Any SOL weakness beyond the May 30 low at $25.62 would provoke a new interpretation of the price structure and raise the probability that the May collapse was the first leg of a more significant corrective process.

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

Bitcoin price action over the last 72 hours indicates that a massive bullish move is coming. In the last two articles, we have taken a look at why this is possible from a technical and on-chain perspective. 

More Bitcoin News

Luna Classic price: Binance burned 6 billion LUNC, triggering massive rally in the altcoin

Luna Classic price: Binance burned 6 billion LUNC, triggering massive rally in the altcoin

Luna Classic (LUNC) price witnessed a massive spike on Friday, after yielding 12% gains overnight. The move came after the world’s largest crypto exchange, Binance announced it would be burning 6.39 billion LUNC tokens. 

More Luna Classic News

Binance native token BNB and staking derivatives bleed after $5 million DeFi exploit on Ankr Protocol

Binance native token BNB and staking derivatives bleed after $5 million DeFi exploit on Ankr Protocol

Binance’s native token BNB suffered a 3% decline in response to the $5 million exploit on DeFi protocol Ankr Protocol. The BNB chain-based protocol confirmed that it has fallen victim to a multi-million dollar exploit. 

More Binance Coin News

Cardano price gets underpinned, could move 10% north before New Year

Cardano price gets underpinned, could move 10% north before New Year

Cardano (ADA) price action is trading in more quiet waters as the spillover effects and aftermath of FTX and BlockFi bankruptcies are finally easing into the background. 

More Cardano News

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

Bitcoin Weekly Forecast: Assessing likelihood of 80% rally for BTC before 2023

A massive bullish move is coming. In the last two articles, we have taken a look at why this is possible from a technical and on-chain perspective. In this weekly forecast, we will take a look at Bitcoin’s monthly performance for the last decade and determine if this bullish outlook is possible. 

Read full analysis

BTC

ETH

XRP