Solana Price Potential Breakout Indicated By This…

Solana (SOL) price demonstrated a textbook cup and handle pattern at press time. It is a widely known bullish continuation setup that leads to large upward moves that take place in line with traditional financial markets and cryptocurrencies.

Solana’s long-term weekly chart shows us that we’ve been in a well-developed ‘rounded’ structure since late 2021 and into 2024. This is where Solana price formed the ‘cup’ of the bottom trend line.

When writing, Solana seems to be in the “handle” range. This smaller consolidation phase usually presents downward or upward movements with regular breakouts.

The critical resistance level to focus on is near the $220 mark. It coincides with the upper limit of the cup pattern and the head and shoulders neckline for the resistant breakout.

More About Solana’s Chart Pattern

The start of the pattern is a gradual descent into a rounded base that aligns with periods of selling pressure and subsequent accumulation by investors. Buying strength builds on the right side of the cup as it forms and culminates in a test of previous resistance levels.

Like this textbook behavior, Solana’s price structure has a steadily rising price supported by growing trading volumes since mid-2022 and up to 2024.

The currently developing part of the handle is usually a slight pullback or sideways trading range. This is where it swings up and down, but with no change in the longer-term direction.

It could be temporary buying and selling through here in a bearish trend in order to chop and jerk. That’s until the bulls try to break out above resistance.

While this would be good enough to form a slight downward-sloping wedge within the handle, it also adds credibility to the setup in Solana’s case. It makes sense on a technical basis when the handle leans downwards, trapping late sellers before a breakout attempt.

The inset chart comparison shows that there was a smaller cup and handle formation from the past market cycle that broke out and rallied successfully. It provides historical support to the pattern’s reliability.

Solana Price Shows Bulls are in Control

The current Solana market data strengthens the technical analysis. When writing, the price of Solana was at $149.09 with a 0.17% increase in the past 24 hours. The 24-hour trading volume went up to $3.08 billion.

There was healthy market activity as confirmed by a volume to market cap ratio of 3.93%. It further confirmed the possibility of a future breakout.

Moreover, the uptick in volume coincided with the technical expectation that breakouts from cup and handle patterns need a lot of participation. Even so, Solana’s internal metric indicated that it had the structural hand to play when the $220 resistance couldn’t be held.

Short-term Analysis Showed Risky Waters Ahead for the Solana Price

While longer timeframes hint at a further bullish continuation, shorter timeframes hint at some risks in the near term. The 4-hour chart showed that Solana just recently formed a rising wedge. A breakdown usually follows the pattern.

Furthermore, a head and shoulders pattern has been compounded, with the right shoulder forming close to current price levels. In case these bearish setups are proven true, we could witness a short-term decline towards the $133 to $131 area.

The Chaikin Money Flow (CMF) indicator stood at 0.03 at press time. It indicated the accumulation and distribution of an asset. This slightly positive reading suggested a little infusion of capital, but it was not the kind of buying that usually leads to an imminent breakout.

A sharp increase in CMF usually follows a breakout after a cup and handle formation. It may be important for Solana price in upcoming sessions.

The only way a successful breakout above the $220 neckline could occur in the longer term is by activating the measured move target based on the depth of the cup. Such a projection suggests that Solana could also see downswings to the $400 to $600 zone in the coming months.

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