Have you sold your SOL? Solana Price Eyes 35% Jump As Two Technical Signals Turn Bullish

At least two technical indicators show Solana ( FLOOR ) could experience a strong price rally in June, even after the SOL/USD pair fell 7...

At least two technical indicators show Solana (FLOOR) could experience a strong price rally in June, even after the SOL/USD pair fell 78.5% year-to-date.

SOL price is approaching an upside breakout

First, Solana painted a “falling cornersince May, confirmed by its fluctuations inside two descending and converging trend lines. Traditional analysts view descending wedges as bullish reversal patterns, meaning they resolve after price breakouts at the above their upper trend lines.

As a general rule of technical analysis, the profit target of a falling wedge is measured after adding the maximum distance between its upper and lower trend lines at the breakout point. So, depending on the breakout level of SOL, its price would rise by around $20, as shown below.

SOL/USD daily price chart showing a “rising wedge” breakout pattern. Source: Trading View

This puts SOL’s price target at $58 if measured from the current price, which is around 35% higher. But if the price pulls back after testing the upper trendline of the wedge and continues to fluctuate inside its range, SOL’s profit target would continue to decline.

The Solana token can reach at least $44 after breaking out of its wedge pattern.

Bullish Divergence

Other bullish clues for Solana come from a growing separation between its price and momentum trends.

In detail, SOL recent bearish moves accompany an upward retracement in the readings of its daily Relative Price Index (RSI), a dynamic oscillator that detects overbought (>70) and oversold (>70) of an asset (

SOL/USD daily price chart showing price-momentum divergence. Source: Trading View

This situation, otherwise called “bullish divergence“, shows that the bears are losing control and the bulls would take over the market.

Solana still faces downside risks

Tom Bulkowski, financial markets veteran believes falling wedges are poor bullish indicators, however, with a higher breakeven rate of 26%. Meanwhile, there is only a 64% chance that a falling coin will hit its profit target, leaving Solana room to continue its downtrend.

Related: Solana devs are tackling bugs in hopes of preventing further outages

Bulkowski says:

“The only variation that works well is a downside breakout in a bear market.”

The fundamentals around Solana are consistent with a bearish outlook. They include a Warmongering Federal Reserve and the negative impact of their tightening on riskier assets, including cryptos and stocks.

As a result, SOL could decline under said macro risks, with its next potential downside target in the $19-$25 area, as shown below.

SOL/USD weekly price chart. Source: Trading View

This range was instrumental as support during the March-July 2021 session.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.