Published June 6, 2022
Last week the Solana outage bolstered the bear cycle inside the falling wedge pattern and plunged it to a May 12th low of $38. However, the high demand pressure below this level reverted the price higher, hitting the overhead resistance trendline. A bullish breakout from the wedge pattern may soar the SOL price to 40% higher.
In April, a V-top reversal plunged the Solana(SOL) price to monthly support of $78.2. However, submitting to the outraged selling in May, the coin traders lost this foothold and continued the downfall to a low of $36.
Amid the ongoing uncertainty in the crypto market, the selling pressure has decreased, but the price follows a slow and steady fall. Thus, the declining price has shaped into a falling wedge pattern, suggesting a reversal opportunity.
On June 4th, the SOL price rebounded from the $37.5 level, indicating the traders are respecting the new support. Today, the altcoin is up by 12%, and the long bullish candle teases to breach the overhead resistance trendline.
A falling wedge pattern is known to initiate a strong upside movement as the price knocks out the overhead resistance. Thus, if SOL buyers complete this pattern, the altcoin should rise 40% to reach the $60 psychological level.
On the other hand, unexpected fallout from the support trendline and $37.5 may extend the downtrend to the July 2021 bottom support of $22.2
Some traditional pivot level aligned with horizontal chart level increases the weightage of those areas of interest. For example, the chart shows pivot-S1 in confluence with the $22.2 mark, R1 with $81.8, and Pivot(P) with $60.
The Vortex indicator maintains a significant gap between the bearishly aligned VI+ and VI- slope, indicating sustained selling momentum.
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