Solana (SOL) is signaling the potential for a bullish reversal amid the shifting market trends. Crypto analyst Ali Charts has identified a promising pattern on SOL’s chart.
The analyst’s findings suggest a possible buying opportunity for traders, despite the persistent downward pressure in the broader crypto market.
Ali Charts shared his analysis on X, highlighting a bullish megaphone pattern forming on Solana’s chart. He noted that Solana might be developing a bullish megaphone on the 4 hours chart.
This pattern is characterized by diverging trend lines, with each subsequent high and low being higher than the previous one.
I know, the dip keeps dipping! However, #Solana might be forming a bullish megaphone on the 4-hour chart. The recent correction to the 61.8% Fibonacci level and oversold RSI suggest it could be a good time to buy $SOL.Consider placing your stop-loss around $156-$154 and… pic.twitter.com/ylnaPAf2EV
— Ali (@ali_charts) August 1, 2024
Solana Price Analysis
The recent price correction has brought Solana to a critical support level. Ali notes that SOL has dipped to the 61.8% Fibonacci level, an area he notes to be key for traders.
This level frequently acts as a turning point for price action, potentially signaling a reversal. Adding weight to the bullish case, Ali points out that Solana’s Relative Strength Index is currently in oversold territory.
Besides, an oversold RSI often precedes a price rebound as buying pressure typically returns at these levels. This indicator, combined with the Fibonacci support, strengthens the possibility of an upward move.
Read also: Why You Need to Hold at Least 1,000 Ripple (XRP) Tokens: A Michael Saylor Insight
SOL Price Prediction
For traders considering a position in Solana, Ali suggests a cautious approach. He recommends placing a stop-loss around $156-$154, just below the 61.8% Fibonacci level. This conservative stop-loss aims to protect against further downside risk.
On the upside, Ali proposes take-profit targets between $200 and $259. These levels align with key Fibonacci extension levels and the projected move based on the megaphone pattern. Reaching these targets would represent a recovery for Solana.
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Show more +Show less – Market Implications of a Bullish Reversal
If Solana’s price follows the bullish megaphone pattern, it could have broader implications. A strong rebound might boost investor confidence in SOL and potentially influence sentiment in the wider crypto market.
The 61.8% Fibonacci level could serve as a springboard for future price increases. Per price data from CoinGecko at press time, SOL trades at $164.56 with a trading volume of $4,976,062,612. This shows a 1.12% and a 6.57% price decline in the past week.
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