Based on the price movement and analysis of various indicators, there is strong evidence supporting the current upward trend and suggesting that the SOL price is likely to continue its ascent in the coming days.
Solana Price Breaks 600-Day Resistance Line
A thorough analysis of the weekly time frame reveals that SOL experienced a significant breakthrough two weeks ago. During this breakthrough, it surpassed a descending resistance line that had been in place since November 2021, spanning over a period of 600 days.
Breakouts of this nature often indicate the end of the previous trend and the initiation of a new trend in the opposite direction. Therefore, it is likely that the SOL price has begun a bullish trend reversal. This possibility is further supported by the presence of four bullish candlesticks since the lows observed in June.
Moreover, the breakout is supported by the weekly Relative Strength Index (RSI). Traders often utilize the RSI as a momentum indicator to determine if a market is overbought or oversold, guiding their decisions to buy or sell an asset.
The RSI has shown a higher low and is currently above 50. Last week’s closing above 50 marked the first occurrence of such since the conclusion of 2021.
Is the Bullish Reversal Confirmed?
Based on the technical analysis of the daily time frame, the SOL price has experienced a rapid increase since June 10. This increase led to a breakout from an 81-day descending resistance line, indicating the initiation of a new trend reversal.
The likelihood of a trend reversal was further reinforced when the Solana price reclaimed the $26 horizontal area, which is now expected to act as a support level.
On July 14, SOL reached a new yearly high of $32.13. Although it experienced a subsequent fall after creating a long upper wick, it still trades above the $26 area.
Furthermore, the daily Relative Strength Index (RSI) provides a bullish reading. The indicator is on the rise and currently above 50, suggesting a bullish trend. Although it is currently in overbought territory, there are no bearish divergences indicating a potential drop.
Hence, there is a possibility that the upward movement will continue toward the next resistance area at $38.
Nevertheless, it is important to note that if the price closes below $26, the breakout will be invalidated, potentially leading to a drop to $20.
However, apart from the presence of a long upper wick, there are no other indications suggesting such a scenario.
Disclaimer: This price analysis article is for informational purposes only and should not be considered financial or investment advice.