Why traders should not ignore Solana price action this week
- Solana price is stuck in a range, trading below the $102 to $104 support area.
- Investors can expect SOL to return to $135 after successfully flipping the $104 hurdle into support.
- A daily candlestick close below the range low at $80.76 will invalidate the bullish thesis for SOL.
Solana price has been consolidating below a stiff resistance barrier for quite some time. The recent uptick in buying pressure has pushed it above the said level, flipping it into a support floor. As a result, market participants can expect SOL to kick-start an explosive move to the upside.
Solana price awaits bulls’ comeback
Solana price is still stuck trading inside the range extending from $80.76 to $121.52. This boundary was formed after SOL rallied roughly 50% between January 24 and February 7. Rangebound moves are often simple to trade and usually involve a sweep above/below a limit followed by a retest of the other.
Likewise, Solana price swept the range low at $80.76 in February and rallied 83% to above the range high at $122.64. However, SOL extended well beyond the upper limit and set a swing high at $143.64.
The bearish market structure coupled with retail fear and profit-taking, however, resulted in a 32% correction that pushed Solana price back into the range and below the $102 to $104 support level and 50% retracement barrier at $101.70.
Since April 12, Solana price has been coiling up under these two crucial hurdles, awaiting a resurgence of buyers or bullish momentum to kick-start an upswing. As Bitcoin price begins a minor upswing, altcoins, including SOL, are likely to follow suit.
Hence, a surge in buying pressure that pushes SOL to flip the $104 hurdle into a support floor will trigger a 17% move to retest the range high at $121.52. In some cases, SOL bulls can extend the rally, allowing Solana price to tag daily candlestick closes at $136.92 formed on April 3 and 4.
This run-up, in total, would constitute a 35% gain from the current position at $101.19 and is likely where the upside will be capped for SOL.
SOL/USDT 1-day chart
If Solana price produces a daily candlestick close below the range low at $80.76, it will create a lower low, skewing the odds in the bears’ favor and also invalidating the bullish thesis. In such a case, SOL could slide.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
