- Solana Gains Momentum to Surmount Tough Resistance
- Bull Flag Pattern Suggests $40 Target
- Cautious Investors Should Wait for Movement Before Entering
Solana is a blockchain that is competing against Ethereum, and it is trading in a relatively narrow range against the US dollar. As with many other cryptocurrencies, Solana saw a low late in 2020, and then went on to join the crypto market rally.
However, in recent weeks the price action has been stagnating. It has been having difficulty staying above $20, as sellers enter the market whenever there is a bounce.
What does the technical picture show?
SOLUSD chart by TradingView
Bullish Bias Remains Despite Recent Consolidation
During the bear market of 2022, the market formed a descending triangle with a flat base between $25 and $30. The support was eventually broken as the price dropped below $10, but buyers re-emerged when Bitcoin and other major cryptocurrencies started their rally in early 2023.
After joining the market rally, Solana encountered resistance in the previously-mentioned support area. It is now attempting to break through, and it appears to be forming a bull flag pattern.
Bull flags are continuation formations. The measured move is equal to the distance from the recent bottom to the start of the flag, which is projected from the flag’s upper trend line.
This points to a move above $40, but buyers should not be too eager to go long. Ideally, investors should wait until the market closes above the resistance area, which would indicate that the bull flag pattern has completed. Then, it would make sense to stay long with a stop set at $24 and target $40.