According to Finbold, Solana (SOL) is showing signs of a potential significant rally, with technical indicators suggesting a possible 1,600% increase in value. The decentralized finance (DeFi) asset is currently forming a 'cup and handle' pattern, a bullish setup that often precedes price breakouts. This pattern, highlighted by cryptocurrency analyst Ali Martinez, indicates a period of accumulation and consolidation, with the base forming between late 2022 and early 2024. The handle, a shorter-term pullback, aligns with Solana's recent price movements around the $250 resistance level.
Martinez suggests that if Solana breaks out from this pattern, it could target a record high of around $4,000, supported by the 1.618 Fibonacci extension pointing to $2,236 and the 1.786 extension aligning with the $4,000 target. Solana's current position above the 0.786 retracement level of $123.44 further supports its bullish momentum. However, no specific timeline has been provided for when these targets might be achieved. Achieving a $4,000 price would significantly elevate Solana's market cap, potentially placing it on par with Bitcoin if the latter experiences minimal growth.
In the short term, Solana has faced bearish sentiments, but recent developments suggest a potential reversal. Trading analyst CryptoBusy noted a double-bottom pattern in the one-hour timeframe, indicating a possible bullish breakout. If this momentum continues, Solana could target the 0.5 Fibonacci level at $225 and the 0.618 level at $230, with a potential price increase of $10 (4.56%) from the breakout point. On-chain metrics also support this outlook, with data from DeFiLlama showing a surge in Solana's daily trading volume from $2.92 billion to $5.99 billion, reflecting growing liquidity and investor interest.
Regulatory developments could also impact Solana's price. The Securities and Exchange Commission (SEC) is anticipated to approve a Solana exchange-traded fund (ETF), although outgoing SEC Chair Gary Gensler has reportedly rejected it, questioning Solana's status as a security. The Solana community remains hopeful for approval under a potential new administration. At the time of reporting, Solana was trading at $225.60, with daily gains of over 5%, although it is down nearly 3% on the weekly chart. Solana's trading above the 50-day and 200-day simple moving averages, along with a 14-day relative strength index of 45.25, suggests room for growth without entering overbought conditions, indicating a strong potential for an impressive 2024.
