Solana (SOL) has experienced a significant surge in price, gaining bullish momentum above $110. This surge has caught the attention of investors, with the bulls now setting their sights on a move above the $120 level. The recent increase in SOL price started from the $95.00 support against the US Dollar. Currently, the price is trading above $105 and the 100 simple moving average (4 hours), indicating a strong bullish trend.
On the 4-hour chart of the SOL/USD pair, there is a key bullish trend line forming with support at $109.20. This trend line showcases the upward trajectory SOL price is taking. Moreover, SOL is now trading above $110, further affirming the bullish sentiment. The trend line aligns closely with the 50% Fib retracement level of the recent wave from the $103.38 swing low to the $114.98 high, marking it as a crucial level of support.
Potential for Continued Rally
The bullish momentum of SOL suggests that the pair could continue to rally if it successfully clears the $115 and $118 resistance levels. The immediate resistance lies near the $115 level, with the next major resistance at $118. A successful close above the $118 resistance could pave the way for another major increase. Should the momentum continue, the next key resistance is estimated near $125. Further gains might push the price toward the $132 level.
Downside Risks
While the current outlook for SOL is bullish, there are still downside risks to consider. If the price fails to rally above the $115 resistance level, it could initiate a downside correction. The initial support on the downside can be found near the $112.20 level. In the event of a further decline, the first major support is located around the $109.20 level, coinciding with the key bullish trend line discussed earlier. A close below this level may lead to a test of $105.
Technical Indicators
Analyzing the technical indicators, the 4-hour MACD (Moving Average Convergence Divergence) for SOL/USD is gaining pace in the bullish zone. This suggests that the bullish momentum is still strong. Additionally, the 4-hour RSI (Relative Strength Index) for SOL/USD is above the 50 level, further confirming the bullish sentiment.
Solana has proven to be a strong performer in the cryptocurrency market, with its recent surge in price. The bullish momentum and the formation of a key trend line indicate that SOL may continue to rise in the short term. However, investors should be mindful of potential downside risks. As with any investment, it is important to conduct thorough research and assess the risks before making any investment decisions.
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