The worth of Solana (SOL) could rise by over 45% within the coming weeks because the cryptocurrency intends to finish a double-bottom chart sample in opposition to the U.S. greenback.
A $150 SOL forward?
Double-bottoms usually seem on the finish of a downtrend when the worth falls to a low, rebounds, and returns to the extent close to the earlier low. With bears unable to push the worth to a more moderen low, the promoting sentiment exhausts, resulting in a pointy upside retracement and a breakout transfer afterward.
SOL has been considerably painting a similar pattern since Jan. 24, particularly after extending its rebound transfer by rising 25% week-to-date (WTD) to succeed in above $100.
Moreover, a visual bullish divergence between the Solana token’s value and relative power index (RSI) traits signifies a excessive chance of a double-bottom breakout.
Nonetheless, a bullish affirmation would possibly come if SOL’s value breaks above the double-bottom neckline close to $120 with an increase in buying and selling quantity. Because it occurs, the Solana token’s upside goal could possibly be at size equal to the utmost distance between the double-bottom sample’s lowest level and its neckline.
That might put SOL en path to a minimum of $150, with a risk of continuous the bullish transfer towards $170, marked in pink within the chart above.
Bull lure dangers
As double-bottom envisioned SOL at $150 or above, in style market analyst “Capo” warned a couple of potential bull trap within the Solana market, noting that altcoins, on the entire, would resume their downtrends.
The pseudonymous analyst introduced $120, the double-bottom neckline, as a strong resistance degree that may most probably restrict SOL’s ongoing upside retracement. He additionally utilized the favored Elliott Wave Concept to trace in regards to the starting of Solana’s subsequent bearish wave cycle, as tagged with “c” within the chart under.
“It is not possible to me to be bullish right here, after the break of all of the bullish MS + correctives strikes to the upside,” Capo said on March 1, including:
“You’ll be able to benefit from the LTF pumps whereas they final, however do not get too cozy.”
The bearish outlook lined up with a CoinShares report published last week confirmed most altcoin-based funding automobiles witnessing destructive investor sentiment, together with Binance Coin (BNB), Polkadot (DOT), Cardano (ADA), Ripple (XRP), and Litecoin (LTC).
Solana additionally suffered because the week ending Feb. 25 noticed SOL funding merchandise shedding $2.6 million in capital outflows.
In distinction, all of the digital asset funding merchandise mixed attracted $36 million in the identical interval, with multi-asset portfolios injecting the very best capital — of $14 million, adopted by Bitcoin’s 17.3 million.
The views and opinions expressed listed here are solely these of the writer and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer includes danger, it is best to conduct your individual analysis when making a call.