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Solana (SOL) hits the top of the watchlist as SOL/USD spiked higher on news and a rise in broad market volatility. Will the bulls have enough to break the falling trendline?

Upside Trendline Break in Solana (SOL) Ahead?

SOL/USD 4-Hour Crypto Chart
SOL/USD 4-Hour Crypto Chart

We last looked at Solana two weeks ago as the pair continued to pullback from all-time highs around the $260 handle, saying that we could see a dip to the broken previous resistance area around $215. Well, the bears were actually able to take SOL/USD down to roughly the $185 – $190 range before bulls would stop them in their tracks.

After three attempts to break below $185, have the bear given up? Well, we do have an arguably bullish catalyst for SOL as the Grayscale Investment Trust launched a product today giving exposure to the Solana token. That means Grayscale will start gobbling up Solana’s utility token to give institutional and accredited invested exposure to one of Ethereum’s top challengers, with over 500 apps and one million users on the Solana network.

Is this bullish enough to break the falling ‘highs’ pattern on the chart above? We’ll see, but for now we’ll be cautiously watching for a break in that pattern before considering a long position.

We’ll also have to keep an eye out on what’s happening in the broad markets as traders may soon lean risk-off after Fed Chair Jerome Powell’s statement today, hinting that the bond purchasing program may need to end sooner than anticipated due to high inflation conditions. If this new narrative takes hold, then we’ll like see a strong U.S. dollar and cryptos may broadly fall in this environment.

If so, then this retest of the falling ‘highs’ pattern may turn out to be a selling opportunity for short-term players, especially if upcoming inflation data (Lots of PMI data ahead to provide inflation clues) remains high and we get more talk from central bankers that monetary policy tightening may be needed sooner rather than later.

What do you all think? Will Solana break the falling trendline? Or is this another selling opportunity for short-term traders to jump on if broad market sentiment turns sour? Let me know in the comments section below!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.