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Catalin
Published On: Oct 17, 2024
2 min

Is Solana on the Verge of a Breakout? Analyzing SOL’s Potential Surge

Solana (SOL) has been gaining momentum, rallying 33,57% in the past month, sparking optimism among traders. But is SOL poised to continue its upward trajectory? 

Let's dive into the technical analysis to assess what’s next for Solana’s price.

Solana's Signs of Breakout

After plunging to around $128 amid the broader crypto market downturn, Solana made an impressive comeback, recently reaching a peak of $159. However, despite multiple attempts, it hasn’t managed to break past this key resistance level. 

On a positive note, bullish pressure appears to be building as SOL forms higher lows, with solid support at $120 and more recently at $144,54. These moves have created an “Inverse Head and Shoulders” pattern—a classic indicator hinting at a potential breakout above resistance.

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Currently trading near $155, Solana has surged past its annual VWAP and its critical value area, both centered around $144. Additionally, it has crossed above both its 50 and 200-day moving averages, though they remain in a downward crossover. Despite this, the technical setup suggests an optimistic outlook for a continued bullish trend. Momentum indicators also show positive signs, with price and oscillators backing an upward move.

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Key Insights on Solana Derivatives (SOLUSDT)

Solana’s latest rally has been accompanied by rising interest in SOL/USDT perpetual contracts, with speculators predominantly betting on the buy side. However, a stable CVD (Cumulative Volume Delta) indicates that selling pressure still lingers. Funding rates remain positive, showing a majority of buyers in the market, and recent liquidation data suggests seller capitulation as Solana’s price strengthens.

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Solana is hovering just below a significant liquidation zone at $163. Above this point, we can identify smaller liquidation zones around $174, $185, and $194, suggesting that breaking above these levels could trigger a wave of buy orders, increasing volatility. On the downside, liquidation zones are close to $144, and a major one at $127. As Solana's price approaches these areas, we can expect heightened volatility, offering both risks and opportunities for investors.

Final Thoughts

Solana is in a critical phase. With bullish patterns emerging and increasing interest in derivatives, the market looks primed for action. Traders should watch the key resistance levels and liquidation zones closely, as breaking through these could unleash a new wave of volatility and potential gains. Will Solana defy resistance and continue its rise? The next few days could provide the answer.

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Catalin

Catalin is the co-founder of Altrady. With a background in Marketing, Business Development & Software Development. With more than 15 years of experience working in Startups or large corporations. 

@cboruga
@catalinboruga5270