The Solana (SOL) cryptocurrency, keeping pace with the broader fluctuations in the crypto market, experienced a 7.5% price drop in the past 24 hours. However, acclaimed analyst Rekt Capital dismisses concerns of a looming bearish cycle.
Rekt Capital, in his recent technical analysis of Solana, indicated signs of an 80% potential price rally, drawing insights from its current consolidation pattern. His perspective proposes that the digital currency is moving within what appears to be a bullish trend, demonstrating a bull flag configuration on the weekly SOL/USD chart from Binance.
The bull flag pattern usually manifests after a sharp, near-vertical price increase, and is characterized by a downward sloping consolidation resembling a flag atop a pole. The pole symbolizes the initial price surge, while the flag reflects a consolidation period characterized by converging trendlines.
Trading enthusiasts keenly anticipate a decisive breakout above this flag, likely indicative of a continuation in the previous uptrend. In the case of Solana, the analyst noted a recent stagnation at the bull flag pattern’s apex at $208, signaling a minor hindrance in its gaining momentum.
Rekt Capital went on to underscore that Solana could potentially form a bull flag before breaking out to re-challenge the range high $208 resistance. He identified the lower end of this bull flag, approximately $184, as a crucial support level that needs to be preserved to fuel the bullish momentum. The bullish momentum could continue if Solana holds above this crucial level.
The analyst, Rekt Capital, further noted that while occasional drops or “wicks” dipping into the $173 range might occur, the price should generally linger above the $184 line of support on the weekly time frame to endorse the bullish forecast. The $173 price level is visually represented by a blue horizontal line on the chart, marking an additional support zone.
Projecting future price targets, the chart indicates an 80.57% potential rally from the base of the bull flag, potentially translating to a target price of roughly $330 upon the confirmation of the bull flag pattern in upcoming days or weeks.
However, the bearish traders seem to gain an upper hand on smaller time frames. For instance, on the 2-hour chart, Solana lost some steam, hinting at possible short-term consolidation or a downward trend. SOL faced a steep -13% decrease, breaching a notable upward trendline (black) that previously offered support to an ascending trajectory.
Solana’s price has cut through the Fibonacci retracement levels from the swing low of $162.68 to the high of $204.19, presently hovering around the 0.618 Fib level at $178.54. Although this level often acts as a robust support zone, a sustained drop could accelerate losses towards the next levels at 0.786 ($171.56) and potentially the full retracement at $162.68.
Volume indicators corroborate a noticeable hike in selling pressure during the price dip, boosting the current bearish momentum. In addition, the Relative Strength Index (RSI) nosedived to 29, perilously close to the oversold vicinity. Although it implies a seller-driven market, it could also pave the way for a relief bounce if the RSI dips further into oversold territory and provokes a reactive buying lag.
 could see an 80% rally based on its bullish trend and potential breakout.){kind=link}