Solana Tests Inverse Head and Shoulders Pattern: Is a Bullish Breakout on the Horizon?
Solana’s (SOL) price movements have captured market attention with an inverse head and shoulders pattern indicating potential bullish momentum, according to crypto analyst The Moon. This pattern, a widely recognized bullish reversal indicator, signals that buyers may be poised to push prices higher.
As at press time trading at $167.36 with a 24-hour trading volume of over $5 billion, Solana is showing signs of recovery despite a slight 2.48% dip. Key levels to watch, especially the neckline, suggest a promising path forward for traders if bullish momentum continues.
🚨#Solana retested the Head and Shoulders pattern last night! As long as we stay above the neck line, the trend remains bullish!
$202,74 🎯 pic.twitter.com/DfUYVxlIAK
— The Moon (@TheMoonCarl) October 26, 2024
Inverse Head and Shoulders Formation Signals Potential Reversal
An inverse head and shoulders pattern on the SOL/USDT pair shows distinct formation, with the left shoulder, head, and right shoulder outlined around the $165–$170 range. This neckline level, once broken, often signals a shift in control from sellers to buyers.
Historically, a breakout above the neckline initiates an upward trend. For Solana, this breakout has provided bullish indications, suggesting that a significant price increase is possible.
Neckline Breakout: A Positive Sign
Solana recently broke above the neckline, landing it in bullish territory. This level, previously resistance, now serves as a foundation of support at $167. The successful breakout could fuel upward momentum, positioning Solana for further gains as long as prices remain above this key level. A stable move above the neckline strengthens market confidence and could guide SOL toward the next resistance level near $202.74.
The $202.74 level is a critical resistance marker on the SOL/USDT chart, aligned with previous highs. If Solana breaks past $202.74, the bullish momentum could push prices higher. However, failure to break this barrier could slow the current uptrend.
A retracement in Solana’s price would bring the $165 neckline into focus as a potential support level. Maintaining support here is crucial. Falling below this threshold could signal a loss of momentum, possibly invalidating the inverse head and shoulders pattern.
Projected Target Based on Pattern Analysis
Based on the height of the inverse head and shoulders pattern, technical analysis projects an upward target of $200 to $205. This range aligns with a measured move, and a push to this target would confirm the bullish reversal signaled by the pattern.
SOL/USD 4-hour price chart, Source: Trading view
However, recent technical indicators suggest caution. The 4-hour RSI is at 47.82, showing that SOL is neither overbought nor oversold, while the 1-day MACD remains below the signal line, hinting at possible short-term downward pressure.
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