Solana (SOL) is in strong uptrend, but it looks like the momentum could be stalling at the moment. Is a pullback ahead? If so, what are the technical areas to watch to see if the uptrend remains intact?
October and the first half of November have been a very bullish time period for some of the largest crypto assets, including Solana (SOL), the layer one blockchain that’s currently the number one challenger to the Ethereum network. SOL/USD traded around $140 just forty-five days ago before hitting a high at $260 on November 6th and now trades around $241 for a 70% gain.
Stochastic is currently signaling that the bull run may have run out of steam, putting this pair onto the watchlist as a potential buy-on-a-pullback candidate. And if traders are looking to sell in the this current range (likely on profit taking reasons), then we could see SOL/USD make it’s way down to the broken resistance area around the $215 handle, which would be one weekly ATR (around $30) from current price levels. We’ll be on the look out there for potential bullish reversal patterns as the current price trend and the exponential growth of the Solana ecosystem warrants this crypto asset making it to a longer-term portfolio.
And of of course, if this market breaks below both the rising ‘lows’ pattern and the previous major area of interest around $215, then it’s likely that new negative headlines came out on Solana and/or the macro picture has shifted toward risk aversion (e.g., high inflation rates continues to slow down global economic activity), usually pushing traders into the Greenback and other safe havens.
If that’s a scenario that plays out, then look at a downside break as a potential short-term sell signal as it’s likely longer-term traders will take further profits from a massive run higher in 2021 (up over 15,000% year-to-date), or at least refrain from adding to their positions over the following weeks. This environment would likely push SOL/USD to the $150 area, depending on whatever the bearish narrative may be driving the market in this scenario.
What do you all think? Is Solana on your watchlist? Is SOL a buy now or are you gonna wait for a further dip? Let me know in the comments section below!