Solana (SOL) is at risk of breaking an important long-term support level, but is trading inside a short-term bullish pattern.
The SOL has been declining since reaching an all-time high of $258.6 on November 6. The price initially rebounded in early March, but has been declining since April 2.
It is currently in the process of breaking out of the $47 horizontal zone but is yet to reach close to its bottom. This is an important area as it previously acted as resistance during the old all-time high of May 2021.
Additionally, the RSI has now declined below 50, which is considered a bearish trend signal. This interpretation supports the possibility that SOL will reach a weekly close below the $47 area.
Measuring from an all-time high, the price has dropped by 85%.
Daily Bullish Divergence
Despite bearish on the weekly time frame, the daily chart is showing some bullish signs. These are especially visible in the daily RSI, which has generated a bullish divergence (green line). Moreover, the RSI has already broken above a descending resistance line, which it had since April (dashed).
However, SOL is still following a descending resistance line. It remains to be seen whether it will follow the lead of the RSI and break out. In that case, the next nearest resistance would be at $78.65. This is the 0.382 Fibonacci Retracement resistance level.
Short Term SOL Wage
Furthermore, the six-hour chart is showing that SOL is trading inside a descending wedge. This is considered a bullish reversal pattern, indicating that a breakout would be expected.
So, it aligns with the daily time frame, suggesting that an eventual breakout is likely.
Despite this, the direction of the longer term trend remains uncertain.
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