Key Takeaways:
- SOL price rally faltered as traders began booking profits.
- However, traders remained apprehensive of Solana’s price prospects.
NEW DELHI (CoinChapter.com) — Blockchain platform Solana’s native token SOL’s rally fizzled out on July 16 after closing above $27 for just two days. SOL price buckled under bearish pressure as the bulls failed to continue the rally sparked by the judgment in the XRP-SEC lawsuit.
Long upper wicks highlight the presence of bears near the $27.6 resistance.
The Solana token price dropped over 8% on July 18, forming a daily low near $25. Further downtrend could see SOL price testing the support level near $24.
Moreover, failure of the immediate support level could force SOL price to drop to the 50-day EMA (purple wave) and 100-day EMA (blue wave) support confluence near $20.7.
Conversely, if the SOL price rallies and breaks above the immediate resistance, the Solana token price might challenge the resistance near $32.7.
The RSI for SOL re-entered the natural region after being overbought for nearly a week, clocking at 68.62 on the daily chart.
SOL Price Moving Inside Bullish Triangle Setup
Meanwhile, the Solana token has formed a bullish technical pattern setup called the ‘Ascending Triangle.‘
A horizontal trendline that connects swing highs and an ascending trendline connecting swing lows forms an ascending triangle pattern. Volume helps determine if a breakout is strong.
Under ideal conditions, buyers would enter the market as the trendlines close the gap. As a result, the toke’s price would push above the horizontal resistance with heavy volumes. Unfortunately, a low-volume breakout on the upside will likely fail, resulting in a pullback.
Per the rules of technical analysis, the price target for a breakout is equal to the triangle’s height at its thickest point. If the triangle pattern pans out, SOL could end up looking at a price target near $82, a jump of 220% from current levels.
However, the triangle’s horizontal trendline recently rebuffed SOL’s uptrend, which means the token would likely retest the ascending trendline support before recovering.
Traders Apprehensive Of Solana’s Prospects
However, traders remained jittery about the token’s prospects. A crypto trader, “Horse,” stated it would be unwise to bet against Solana.
If anything, this is the best contextual risk-reward we have had in a while, with the retest of a multi-month range high post-breakout. Right now, this looks like a perp-driven fade. As long as we show strength above 25, this should be good.
Crypto trader Horse stated in a Twitter post
However, another user pointed out that the SOL price likely hit $260 because of disgraced FTX founder Sam Bankman-Fried’s involvement in Solana.
Solana had previously felt the brunt of FTX’s collapse as Alameda Research dumped a substantial sum of SOL tokens to safeguard its interests. Moreover, the blockchain platform’s community recently mused a hard fork to safeguard itself from the SEC lawsuit.
On June 10, crypto journalist Colin Wu noted that demand for a hard fork was catching up on Twitter.
A lack of confidence in SOL’s price action could harm the token’s prospects, especially in the current speculative market conditions.
The post SOL Price Drops Nearly 14% As Ripple-Fuelled Rally Stalls appeared first on CoinChapter.
