Could Solana’s Impressive 17% Weekly Rally Drive Price Towards $4000?
During the past four days, Solana [SOL] has demonstrated notable upward momentum on the price charts. Within this timeframe, the digital asset successfully surpassed the $200 resistance level. Notably, SOL surged from a low of $187 to a peak of $219.
As of the latest update, Solana was exchanging hands at $216, marking a 4.35% increase over the daily trading period. Furthermore, SOL recorded a weekly gain of 17.56%, adding to the excitement among the Solana community.
The recent price surge has sparked optimism within the Solana community, with prominent cryptocurrency analyst Ali Martinez hinting at a potential price breakthrough to $4000. Ali highlighted the formation of a cup and handle pattern on the charts to support this projection.
Is Solana’s Journey to $4000 Feasible?
In his assessment, Martinez suggested that Solana could be in the process of forming a cup and handle pattern, positioning the digital asset to reach the $4,000 mark.
The emergence of a cup and handle pattern typically indicates a shift in market control from sellers to buyers, hinting at a forthcoming breakout.
Historically, such patterns often signal a continuation of a bullish trend. Hence, if this pattern materializes, SOL could experience a significant surge in its price levels.
What Signals Do SOL’s Charts Convey?
Despite the optimistic analysis presented by Ali, it is crucial to explore other key indicators to substantiate the bullish case. For instance, CryptoCrypto’s analysis revealed that Solana has been witnessing a robust uptrend backed by an increase in buying pressure.
An uptick in buying activity has been observed from both individual retail investors and large investors known as whales. Notably, whales have been actively amassing SOL tokens over the past few days, exemplified by a whale withdrawing 132,300 SOL tokens valued at $28.31 million from Binance.
When whales begin accumulating assets, it signifies a positive market sentiment as they anticipate further price appreciation.
Moreover, the market’s bullish outlook is reinforced by a growing number of traders taking long positions on SOL. Data from Binance indicates that 72% of accounts have opted for long positions. A dominance of long positions reflects bullish sentiment among traders who anticipate a price upswing.
Furthermore, the demand for long positions is supported by a favorable DyDx funding rate. A positive DyDx funding rate signifies market optimism as investors are willing to pay premium fees to maintain their positions during market uncertainties.
Evidently, Solana is currently experiencing bullish sentiment from both retail and institutional investors. These market conditions create a conducive environment for SOL to witness further price gains. If this sentiment persists, SOL is poised to challenge the $228 resistance level, and a successful breakout could propel the digital asset towards $245.
However, in the event of renewed selling pressure, Solana may retreat to $194 in the short term. Thus, the possibility of a rally to $4000 remains somewhat remote for now.