The latest market data indicate that SOL’s interim upside target is near $47, up nearly 20% from its current price. Solana (SOL) continued with its recovery trend on June 28 while getting nearer to triggering a classic bullish reversal setup.
SOL’s price gained around 2.42%, reaching an intraday high of $39.40/ The SOL/USD pair is now up 50% as a part of a bigger retracement move that started on June 14 after plunging to lows of $26.
Solana Price Targets 75% Rally
The latest buying period in the Solana market has been painting what seems to be an “inverse head and shoulders pattern (IH&S)” pattern. The bullish reversal setup arises when the price forms three troughs in a row below a common support trendline known as “neckline.” Notably, the middle trough is known as ‘head’ and is always deeper than the other two troughs known as shoulders.
An IH&S setup resolves after the price breaks above the neckline level. Furthermore, as a rule of technical analysis, the pattern’s profit target comes to be quite at length equal to the maximum distance between the head’s lowest tip and the neckline.
Suppose SOL breaks above its neckline resistance of $41.50. Then, the opportunities for continuing the bullish retracement stand around 83.5%, with its upside target sitting at more than $68, nearly 75% above the current price.
Interim Resistance Levels
Solana’s road to $68 may encounter hurdles in a confluence of technical resistance levels, which include its 50-day exponential moving average (50-day EMA; the red wave) together with a support-turned-resistance line. Both of the resistance levels are around $47.
SOL remains at a major risk of exhausting its IH&S breakout, which, in turn, may trigger a ‘bear flag’ setup. A pullback from the $47-resistance-level, coinciding with the flag’s upper trendline, may result in a breakdown, as seen in the market chart.
As a result, SOL’s downside target comes to be nearly inside the $23-$30 range, subject to its breakdown point. In a similar Setup, independent market analysts PostyXBT expected SOL’s price to reach $47.
– Higher low & S/R flip
– $BTC still hasn't pushed higher to $23k
– Play the short term trend until invalidated
– Declining volume a concern
Not rushing into an entry at current price. If I don't get filled slightly lower, so be it. pic.twitter.com/IgZbeBAq40
— Posty (@PostyXBT) June 28, 2022
Nevertheless, dropping volumes remain a worry, thus traders need to play the near-term trend until more bullish confirmation, he stated. Hence, SOL’s likelihood of returning lower is high after it reaches $47.
Solana Also Dropped By 85%
Just like many other assets, Solana has lost a considerable amount of its valuation when compared to its November 2021 peak, down more than 85% now.
Furthermore, Solana’s decentralization has also encountered growing scrutiny amid many network outages and a recent incident where it was tried to take control of a whale’s wallet through community voting to force liquidation.
Absolute comedy. @solendprotocol, a supposed “decentralized” lending protocol built on Solana has “voted” to take over a whales account with emergency powers to eliminate the chance of forced liquidation.
“Decentralized” in name only. pic.twitter.com/Vrua3dFoES
— Dylan LeClair 🟠 (@DylanLeClair_) June 19, 2022
On the flip side, some expect Solana’s ecosystem to grow just like the top rival Ethereum did after the 2018 bear market. It includes Spencer Noon, the co-founder of crypto-focused Variant Fund, who said:
“Solana has a vibrant developer ecosystem and its downtime issues are solvable. This will be obvious in retrospect.”