Solana (SOL) has been in free fall since December 03, losing nearly 39% of its value to the range low of $149.173.
On the daily chart, the appearance of an engulfing the bullish V-shaped chart pattern points to a possible upswing towards $244. Solana is now trading at $178 at the time of writing.
A V-shaped recovery in the price of solana aims for a 38%Â increase
On the daily chart, SOL price has spelt out a V-shaped chart pattern, indicating a fast comeback. When an asset falls dramatically and subsequently rises steadily, a V-shaped pattern is formed.
Although, because it has been holding below the 100-day Simple Moving Average (SMA) since December 16, Solana’s comeback may not be as dramatic as a V-shaped recovery would imply. However, the technical picture shows that the price of Solana may continue to rise and complete the V-shaped recovery.
As a result, if SOL price breaks over the 100-day SMA at $185, it might soar to roughly $244, marking a 38 percent increase from the current price. However, Solana bulls must overcome severe resistance from the 200 psychological level, the 50 SMA at 208, and the $221 big resistance mark before achieving this goal.
A purchase signal from the Moving Average Convergence Divergence (MACD) indicator has bolstered the bullish narrative. This happened on December 18 when the 12-day Exponential Moving Average (EMA) passed over the 26-day EMA. When the MACD crosses the zero line into the positive area, the bullish momentum will acquire greater strength.
The Relative Strength Index’s (RSI) movement away from oversold regions demonstrates the strength of the bullish momentum. A break above the midline will trigger more buy orders, propelling Solana price closer to the goal of the current chart pattern before overbought circumstances kick in.
Looking Over the Fence
On the other hand, a daily close below the immediate support level of $173 might result in a flood of sell orders, sparking another downswing. If this happens, the price of Solana might retest the $161 support level and the $149 range low from December 13th.