SOL price eyes $150 in April

Solana (SOL) jumped past a critical resistance level that had limited its recovery attempts several times during the November 2021-2022 price correction, raising hopes of more upside in April.

Solana turns key resistance into support

To summarize, the price of SOL underwent extreme pullbacks when testing the multi-month down trendline in recent history.

For example, the SOL/USD pair fell 60% two months after pulling back from said resistance level in December 2021. Similarly, it had fallen more than 40% in a similar retracement move led by a sell-off near the trendline in November 2021. .

SOL/USD daily price chart. Source: TradingView

But Solana reversed the resistance trendline as a support (S/R flip) after breaking above it on March 30, accompanied by an increase in trading volume demonstrating traders’ belief in the breakout. In doing so, the price of SOL rose 25% to $135, bringing the psychological resistance level of $150 within reach.

Why is SOL (technically) bullish?

From a technical perspective, SOL’s breakout above the falling trendline resistance coincided with a bullish crossover between the two main moving averages: the 20-day exponential moving average (20-day EMA; the green wave) and the 50-day EMA ( the red wave).

The technical indicator, also known as the golden cross, occurs when an asset’s short-term moving average jumps above its long-term moving average. Traditional analysts view this crossover as a buy signal.

SOL/USD daily price chart with ‘Golden Cross’. Source: TradingView

For example, the 20-50 EMA crossover in August 2020 may have helped push the price of SOL more than 650% to over $267, among other fundamental and technical catalysts. As such, the golden cross increases SOL’s probability of continuing its rally as well as its breakout above the falling trendline resistance.

RSI divergence

The upside outlook continues to improve if we are to believe a technical fractal highlighted by Delphi Digital.

The crypto research firm highlighted a correlation between the price of SOL and the combination of its two technical indicators: the S/R flip and relative strength index (RSI) divergence.

Notably, the first time Solana’s RSI jumped above 70, an “overbought” area, after a strong price uptrend – which also saw it break above the declining trendline support of that period – SOL tended to continue rising despite the RSI lower or sideways consolidated.

Solana daily price chart with S/R flip and RSI divergence. Source: Delphi Digital

For example, SOL rose 378% after the RSI broke above 70 for the first time in August 2021. Similarly, the period of an overbought RSI in May-June 2021 also coincided with Solana’s upward move of 268%. The fractals seemed similar to how SOL was performing lately, Delphi Digital suggested.

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Therefore, SOL/USD could continue its uptrend using Fibonacci retracement levels, pulled between $261 swing high to $77.50 swing low, suggesting $147-$150 is the intermediate upside target.

SOL/USD daily price chart. Source: TradingView

Conversely, a pullback at or prior to testing the $147-$150 price range could cause SOL to retest the $120 as its mid-term support, with a potential shift towards the 20- and 50-day EMAs.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risks, you should do your own research when making a decision.

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