The Solana project has fallen on hard times over the past month as U.S. regulators aggressively tighten the screws. It seemed that the SOL token is torn to renew annual lows. Now, however, price trends are showing that there is hope on the horizon.
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Solana has recovered above important support
As the results of technical analysis of the daily chart show, SOL has recovered 33% since June 10. The start of this rally was preceded by a very long bottom wick, which is considered a sign of buying pressure (green sign).
The significance of this rally is underscored by the fact that the price recouped the horizontal area of $17. After the previous bearish breakout, this area was expected to offer resistance. However, after an initial bounce on June 20 (red icon), the price of SOL moved above that area and reached a high of $20 on June 30.
The SOL is now trading slightly below the downward resistance line, which has been present on the chart since April 17. A break above it could accelerate the pace of growth and eventually confirm the beginning of a bullish reversal.
A break above it could accelerate the pace of growth and eventually confirm the beginning of a bullish reversal.
Source: TradingView
The Relative Strength Index (RSI) is also showing a bullish signal. This momentum indicator is used by traders to assess whether the market is overbought or oversold.
A values above 50 and an uptrend indicate an advantage for the bulls, and vice versa. In this case, the RSI is above 50 and rising, which is a strong sign of a bullish trend.
SOL forecast: wave analysis promises a bottom
In the meantime the wave analysis of the same daily timeframe gives optimistic signals. His results suggest that the SOL price will make a bullish breakout of the resistance line and continue to rise toward the next resistance level at $26.
His results suggest that the SOL price will make a bullish breakout of the resistance line and continue to rise toward the next resistance level at $26.
It looks like the price has completed the A-B-C (black) corrective structure that started on April 15. The correction is confirmed by the overlap between the low of wave A and the current high (red line).
So if this analysis is correct, then the market started rising on June 10 (white line) and will eventually break the resistance line. In that case, the token is likely to reach the next resistance at $26.
In that case, the token will probably reach the next resistance at $26.
Source: TradingView
Despite this bullish outlook, a drop and a daily trading close below the $17 support area would mean that the trend is still bearish. In that case, the price of SOL could fall to $10.
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