At least two technical indicators indicate that Solana (SOL) could rally strong prices in June, even after the SOL / USD pair fell 78.5% year to date.
SOL price is approaching a bullish wedge breakout
First of all, Solana has been painting a “falling wedge” since May, confirmed by the fluctuations within two descending and converging trend lines. Traditional analysts consider falling wedges to be bullish reversal patterns, which means they settle after a price break above their upper trend lines.
According to the rule of technical analysis, the profit target of a falling wedge is measured after adding the maximum distance between its upper and lower trend lines at the breaking point. So, based on a separate level of SOL, its price would increase by about $ 20, as shown below.
This sets the SOL price target at $ 58 if measured from the current price, about 35% higher. But if the price pulls back after testing the upward trend of the wedge and continues to fluctuate within its range, SOL’s profit target will continue to decline.
The Solana sign may rise to at least $ 44 after breaking its wedge pattern.
Bullish variety
Additional tips for Solana come from the growing separation between its price trends and momentum.
In detail, SOL’s recent bearish movements are accompanied by the rise in its daily readings Relative Price Index (RSI), a momentum oscillator that feels overbought (> 70) and oversold (> 70).
This scenario, known as “bull diversity”, shows that the bears are losing control and that the bulls are re-entering the market.
Solana still faces downside risks
However, financial market expert Tom Bulkowski believes that falling wedges are poor bullish indicators, with a 26% higher failure rate. On the other hand, a falling wedge has only a 64% chance of reaching its profit target, leaving Solana’s room to continue the downturn.
Read also: Solana tackles bugs in hopes of avoiding further breakage
Bulkowski says:
“The only change that works well is a downside in a bear market.”
The basics around Solana are in favor of a bearish view. They include a hawkish Federal Reserve and the negative impact of its escalation on more risky assets, including cryptocurrencies and stocks.
So SOL could fall due to the aforementioned macro risks, with the next potential downside between $ 19 and $ 25, as shown below.
This range was supported during the March-July 2021 session.
The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of Cointelegraph.com. All investments and transactions involve risk, you should do your own research before making a decision.
