A minimum of two technical indicators show Solana (SOL) could undergo a clear, crisp cost recovery in June, despite the SOL/USD pair’s 78.5% year-to-date decline.
SOL cost gets near bullish wedge breakout
First, Solana continues to be painting a “falling wedge” since May, confirmed by its fluctuations inside two climbing down, converging trendlines. Traditional analysts consider falling wedges as bullish reversal patterns, meaning they resolve following the cost breaks above their upper trendlines.
Usually of technical analysis, a falling wedge’s profit target is measured after adding the utmost distance between its lower and upper trendlines towards the breakout point. So based on SOL’s breakout level, its cost would rise by roughly $20, as proven below.
That puts the SOL’s cost target at $58 if measured in the current cost, or about 35% greater. However, if the cost retreats after testing the wedge’s upper trendline and is constantly on the fluctuate inside its range, SOL’s profit target would keep getting lower.
The Solana token can rise to a minimum of $44 after breaking from its wedge pattern.
Bullish divergence
More upside cues for Solana originate from an increasing separation between its cost and momentum trends.
At length, SOL’s recent downside moves accompany an upside retracement within the readings of their daily relative cost index (RSI), a momentum oscillator that detects an asset’s overbought (>70) and oversold (
This case, also known as “bullish divergence,” implies that bears are losing control which bulls would capture the marketplace again.
Solana still faces bearish risks
Financial market veteran Tom Bulkowski believes falling wedges are poor bullish indicators, however, having a greater breakeven failure rate of 26%. Meanwhile, there’s merely a 64% chance that the falling wedge would meet its profit target, which leaves Solana with the potential of ongoing its downtrend.
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Bulkowski asserts:
“The only real variation that work well is really a downward breakout inside a bear market.”
Fundamentals around Solana accept a drawback outlook. They incorporate a hawkish Fed and also the negative impact of the tightening on riskier assets, including cryptos and equities.
Consequently, SOL could move lower underneath the stated macro risks, using its next potential downside target within the $19–$25 area, as proven below.
This range was instrumental as support within the March–July 2021 session.
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