Solana (SOL) forms strong base for next stage of bull market

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As a seasoned crypto investor with battle-scarred fingers and a portfolio that has weathered more market storms than the Bermuda Triangle, I have learned to read price action like a seismograph reads tremors. And let me tell you, the $SOL is looking mighty fine right now.

Regardless of the buzz suggesting that Spot Solana ETFs likely won’t be approved this year, the price of SOL has created an attractive foundation for potential growth moving forward.

$SOL follows similar short term price action to $BTC

Looking at short-term movements, the Solana ($SOL) price initially broke free from a descending trend but has struggled to gather pace post-breakout. Despite this, it’s crucial to note that it currently sits well above robust support at approximately $137 and an additional horizontal support level around $141.

As an analyst, I’ve noticed a striking resemblance between the current price movement and that of Bitcoin. Initially, a significant drop occurred, primarily due to the unraveling of the Japanese yen carry trade. Subsequently, there was a swift recovery in a ‘V’ shape, which has now given way to a period of sideways price action.

Three major levels for $SOL

By stepping back for a broader perspective on the weekly chart, we can observe three significant horizontal lines. The uppermost line (drawn in blue) represents where Solana’s ($SOL) price peaked out, and consistently encountered rejections at the $202 mark. Looking back to the previous bull market, it is evident that this level also served as a robust resistance and support point.

At $78.75, the lowest point, sets the minimum within the fundamental pricing framework for $SOL. A dip down to this price in January followed a prior breakthrough, indicating a re-evaluation of this level as potential support.

In simpler terms, the midpoint of the three trend lines is where the value of SOL (SOL) is being maintained at present. This point served as both a significant support and resistance during the 2021-2022 bull market. During this market, the price has dipped below this level multiple times, with the candle bodies even falling beneath it, but the closing prices have always been higher.

As a seasoned trader with over two decades of experience under my belt, I can confidently say that $137 is an astonishingly significant level of horizontal support. If the price were to break through this barrier and confirm below it, it would likely plummet all the way back to the $110 wick caused by the Japanese crash, a memory still etched deep in my mind from those tumultuous times. In fact, if the downward trend persists, we might even see prices drop as low as the $178 support level. This potential scenario underscores the importance of keeping a close eye on market movements and being prepared for sudden shifts in price action.

It’s surprising that the SOL price isn’t following our expectations, but instead seems poised for an upward trend. Potential resistance could be encountered at $173, but beyond that, the aim is to reach the previous local peak at $202. The all-time high is slightly above this at $260 – it’s possible we might see SOL reach this level within the next few months.

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2024-08-21 14:11