by Solana [SOL] the course of the descending channel has finally seen a break to the upside in the last week. After closing above EMA 20 (red) and EMA 50 (cyan), buyers showed their advantage in the current structure.
The recent reversal from the 61.8% Fibonacci level could see a rebound from the short-term EMAs. A drop below the 50 EMA could delay the likely recovery outlook. At press time, SOL was trading at $ 41.9175, down 7.34% over the past 24 hours.
SOL daily chart
Source: TradingView, SOL / USD
SOL’s long-term downtrend channel dragged it towards the $ 28 baseline through mid-June. The south-oriented trends had undermined short-term buying rallies.
Over the past two months, the 61.8% Fibonacci resistance has maintained a strong hold on rallies. After the recent breakout, the bulls have regained strength but the Fibonacci gold level has reduced buying efforts.
Price action now appeared to be consolidating near the 50 EMA. A rebound from this level would confirm a bullish hammer in the daily time frame. In this case, potential targets would rest in Zone $ 46- $ 47. Buyers’ inability to inflict a steep upside could only help sellers prolong the slow phase.
Rationale
Source: TradingView, SOL / USD
The Relative Strength Index (RSI) has found a solid spot above the midline resistance over the past few days. A sustained close above the 60 point mark would reaffirm buying efforts in the coming days.
Furthermore, the CMF took off from the support of 0.06 and merged with the bullish narrative. These readings can help buyers secure 50 EMA support.
Interestingly, the MACD has finally found a place above its zero mark. A sustained stance above this level would indicate a gradual shift in momentum in favor of buyers.
Conclusion
Given the bullish break above the pattern along with the north-facing 20 EMA, SOL could see a comeback rally while facing an obstacle in the $ 46.5-region. The trigger and take-profit levels would remain the same as above.
However, investors / traders need to keep an eye on Bitcoins [BTC] movement to determine its effects on the broader sentiment.
