Solana Price Forms V-Shaped Recovery as Bearish Momentum Weakens – Can SOL Reach $295?

Solana (SOL) has formed a V-shaped recovery pattern, as the technical outlook shows that the bearish momentum is growing weak. This bullish pattern suggests that Solana price may reach $295. Meanwhile, a looming $149 million short squeeze makes such a rally likely to occur in the near term.

At press time, SOL value trades at $156 with a 3% decline in 24 hours. SOL has been shedding much of its value in the last seven days, with the price declining from the recent weekly high of $174 recorded last week.

Solana Price Forms a V-Shaped Recovery

Solana price is forming a V-shaped recovery on the weekly chart, suggesting that an upward momentum to $295 may happen soon. However, this recovery pattern has not yet matured as SOL faces a strong resistance zone between $179 and $203.

If the price of SOL can overcome this resistance level, the upswing could push it to $295. Getting to this point will set a fresh all-time high for the altcoin. This bullish thesis is supported by a recent CoinGaoe analysis citing an analyst forecast of a Solana price rally to $200.

A V-shaped recovery pattern usually signals that the price is recording a reversal after buyers took advantage of the dip that occurred in late April. However, after hitting this resistance zone, buying pressure waned, hence the rejection seen above.

The decline in buyer interest at this resistance zone is evidenced by the RSI, which is below 50 at press time. The dip below 50 suggests a bearish momentum as traders remain hesitant at this resistance zone.

However, the AO histogram bars show a contrarian view as they flip green despite being in the negative zone. This bullish divergence will be valid once the AO surges back above the zero line.

Nevertheless, after a Solana whale moved $441M SOL to exchanges, it increased the risk of a sell-off, making a price decline more likely to occur before the next bullish leg to the target of the V-shaped pattern.

$149M Short Squeeze Looms

Data from Coinglass shows that Solana price is facing a $149 million short liquidation risk, which may squeeze out short sellers and give room for the price to make an upward recovery. This hot liquidation lies at the $159 price, and if SOL were to make a slight 2% gain from its current price, it may wipe out these positions.

A short squeeze is usually bullish for price as short sellers become forced buyers. This will increase the upward momentum and support further gains for this altcoin. These positions also increase the likelihood of Solana’s volatility surging in the near term.

To sum up, Solana price has formed a V-shaped recovery on the daily price chart, suggesting a sharp bullish reversal is imminent. This rally could occur because of the looming short squeeze of $149 million open positions at risk if Solana price hits $159.

For a detailed, long-term  forecast on how Solana price could perform from 2030 to 2050 – Read This.