The overall cryptocurrency market has been on an upward trend for the past two weeks due to rumors of the imminent approval of the Bitcoin ETF. Among the biggest beneficiaries of this surge is Solana (SOL), which has experienced an extraordinary recovery, rising from its last low point of $21.11 on October 13th to its current price of $32.19, a notable increase of 55%. The upward momentum combined with the increasing trading volume indicates a sustainable bullish run. However, is the current upward trend strong enough to take SOL to the crucial level of $50? Let’s take a closer look.
Is $50 in Sight for Solana?
On the daily timeframe price chart, Solana’s price indicates the formation of an ascending channel pattern. Over the past 11 months, the altcoin has been moving within this pattern, encountering dynamic resistance and support.
SOL, which has seen a 0.84% decrease in the last 24 hours, is approaching the upper trend resistance line of the channel, where the momentum of the upward movement tends to increase. If the upper trend resistance line is broken, it could serve as a springboard for a stronger rally.
According to the ideal target set by the formation, a breakout rally could potentially push SOL’s price up by 51% to reach the $54 level. In the worst-case scenario, if the resistance trend line cannot be broken, the price may continue to move downwards within the pattern with shallow recoveries.
What Do the Technical Indicators Say for SOL?
During the major market crash in the second week of November 2022, Solana experienced a bloodbath due to its association with the FTT Token. As a result, the altcoin’s price plummeted from $31.72 to $12.36. It then further declined and dropped below the $10 threshold. With the current recovery cycle, the altcoin has managed to recover all these losses and is currently trading around $33. The reclaiming of a significant bear attack level indicates that buyers have gained enough momentum to extend the recovery trend.
The upward movement from the upper band of the Bollinger Bands indicator on the daily timeframe reflects active buying momentum. Furthermore, the slope of the Average Directional Index (ADX) at 41% suggests that buyers may soon exhaust the upward momentum and a pullback may be needed.
