The bullish sentiment across the cryptocurrency market has triggered notable gains for Solana (SOL), with the coin surging by more than 3% in the last 36 hours.
SOL was trading at $160 on July 17 at 03:27 a.m., and its weekly gains are now 12%.
According to analyst @ali_charts on X, Solana price appears to create a W pattern, suggesting that the token could be in for a major rally to propel prices toward $174.
#Solana appears to be forming a W pattern, which suggests $SOL will surge toward $174! pic.twitter.com/OxXODWi1yA
— Ali (@ali_charts) July 15, 2024
The W pattern often shows a potential bullish reversal. As seen on the chart, SOL has bounced from the low trough as it reverses from a downtrend to an uptrend. If the buying pressure increases further, SOL will break the previous peak, with the target price being $174.
Solana broke past $160 on July 16, creating a fresh monthly high. The recent rebound coincides with rising buying pressure, which has seen most cryptos recover from last week’s lows.
According to CoinMarketCap, SOL’s trading volumes in the last 24 hours have surged by nearly 8%, likely coming from buyers anticipating further tailwinds.
A look at the Solana Relative Strength Index (RSI) line shows that buyers are not relenting. The RSI is at 60, indicating that SOL is in a moderately strong trend, but it is not overbought. The RSI is also making higher highs, similar to the price action. This trend shows that Solana has room for further growth.
Trader @ali_charts further noted that nearly $3 billion in SOL short positions will be liquidated if the price hits $176. This situation can have bullish implications due to the potential of a short squeeze.
As Solana’s price creates higher highs, short sellers might be forced to close their positions to mitigate losses. This will, in turn, increase the buying pressure and drive the prices further up.
Is A SOL ETF On The Way?
Solana is also poised to benefit from the possible launch of spot Ether exchange-traded funds (ETFs) next week.
Bloomberg ETF analyst Eric Balchunas stated that once Ether ETFs get regulatory greenlight in the US; they will open the floodgates for more crypto ETFs, including Solana.
“After launch there’s flows and then additional ETH products I’m sure, then Solana, and then… It’s probably never going to end. The dam is broken,” Balchunas stated.
As ZyCrypto reported, 21Shares and VanEck are among the asset managers that have filed for spot Solana ETFs in the US. If they pass regulatory scrutiny, such products will likely launch in 2025.
