Solana [SOL], currently positioned as the world’s fourth-largest cryptocurrency based on market capitalization, seems poised for a significant upward rally due to its formation of a bullish price action pattern.
In recent times, SOL, similar to other major cryptocurrencies, achieved its all-time high (ATH). Nonetheless, its price is now in a phase of consolidation in proximity to that ATH.
This period of price consolidation near its ATH suggests potential readiness for a further upward rally.
At the moment, SOL is receiving support from its bullish price action, prevailing market sentiment, and increased involvement from both traders and investors.
Solana’s Price Action and Critical Level
Based on technical analysis by CryptoCrypto, SOL has formed a bullish pennant pattern on the four-hour time frame and is currently positioned on the brink of a breakout.
This bullish pattern has emerged near a robust resistance level of $260, supported by recent price movements and historical price momentum.
In the event that SOL successfully breaks out of this bullish pennant pattern, surpasses the resistance level, and closes a four-hour candle above $260, there is a strong likelihood of a 15% rally towards the $299 mark in the upcoming days.
At present, the asset is trading above the 200 Exponential Moving Average (EMA), signaling an uptrend. Traders and investors commonly consider this indicator before making trading decisions.
Moreover, with its Relative Strength Index (RSI) currently at 57.10, there is an indication that SOL still has further room for progression in the foreseeable future.
Varied Sentiment from On-Chain Metrics
Beyond the technical analysis, on-chain metrics demonstrate a mix of sentiments among traders.
As per data from the on-chain analytics firm Coinglass, SOL’s Open Interest has experienced a 3.5% decline, suggesting that traders have either closed their positions or faced liquidations during the recent price correction.
Nevertheless, a breakout from the current price action pattern has the potential to draw the interest of both investors and traders.
Currently, notable liquidation thresholds are situated at $251.2 on the lower end and $264.1 on the upper end, according to Coinglass’s exchange liquidation map.
This data reveals that traders are heavily leveraged at these levels. Therefore, a breakout or breakdown from these levels could offer a more secure entry point for traders.