Solana Poised For a Significant Rally
Crypto analyst Josh Olszewicz has highlighted a highly bullish technical pattern for Solana (SOL) price, suggesting the potential for a major uptrend against the US dollar (SOL/USD). Olszewicz shared his analysis on Twitter, stating that the chart for SOL looks much better than Ethereum (ETH).
A Steep Decline Followed by a Positive Turn
In November 2021, Solana reached a peak price of $260 but experienced a significant decline, dropping to $8 by the end of 2022. This decline was in line with the overall crypto market downturn and was exacerbated by the collapse of FTX exchange, which had a particularly negative impact on SOL.
However, 2023 brought positive news for Solana. The price rebounded from its low to nearly $26 in January, setting the stage for the formation of an inverse head and shoulders pattern.
An Inverse Head and Shoulders Pattern
The inverse head and shoulders pattern is a well-known bullish reversal signal. It began forming in mid-January and continued until October 2023. The left shoulder appeared in mid-March, followed by the head in early June, and the right shoulder became prominent in October.
A crucial aspect of this pattern is the neckline resistance at around $25.81. SOL’s price has tested this resistance multiple times, and if it successfully breaks above it, it would indicate a strong reversal towards a bullish trend. Olszewicz suggests setting the stop loss just below the right shoulder at approximately $19.30.
Potential Price Trajectories
Olszewicz used Fibonacci extensions to chart potential price trajectories for SOL if it surpasses the neckline at $25.81. The targets are marked at the 1.618 ($33.85) and 2.0 ($38.82) Fibonacci levels. If these predictions hold, traders could potentially see profits ranging between 35% and 55% from the current price.
VPVR Supports the Bullish Thesis
The Volume Profile Visible Range (VPVR) provides additional insights, revealing that the most significant trading activity for SOL is concentrated in the $14 to $15 range. Another volume cluster aligns with Olszewicz’s stop loss placement, between $20.83 and $19.30.
Furthermore, if SOL breaks above the neckline of the inverse head and shoulders pattern, there is a large volume gap up to the first price target at $33.85, indicating significant interest and potential resistance in that area.
Await Confirmation of Breakout
In conclusion, while the emergence of the inverse head and shoulders pattern suggests a highly bullish outlook for Solana’s price, it is crucial to wait for a confirmed breakout above the neckline at $25.81, ideally supported by substantial trading volume, before confirming Olszewicz’s bullish projections.
Hot Take: Solana Poised for a Significant Rally
Renowned crypto analyst Josh Olszewicz has identified a highly bullish technical pattern for Solana’s price, signaling a potential major uptrend against the US dollar (SOL/USD). The formation of an inverse head and shoulders pattern combined with key resistance levels and Fibonacci extensions suggest the possibility of a significant rally for SOL. However, confirmation of a breakout above the neckline and strong trading volume are necessary to validate these projections. Traders should exercise caution and closely monitor SOL’s price movements before making any investment decisions.
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