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Solana (SOL) Faces Crucial Juncture: Bullish Momentum Above $85, but Risks Loom Below $80

In the latest developments surrounding Solana (SOL), the cryptocurrency is currently navigating a critical phase in its price trajectory. The digital asset has demonstrated resilience by maintaining a strong uptrend above the $85 mark, showcasing the potential for a fresh rally unless a daily close below $80 disrupts its momentum.

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In a recent Solana price prediction, concerns were raised about a potential downside correction as the price hinted at a short-term top near the $125 zone. Subsequently, SOL experienced a decline, breaching support levels at $115, $105, and $100. However, it managed to remain in positive territory above the 50-day simple moving average (SMA).

Solana price daily chart | Source: SOL/USD on TradingView.com
Solana price daily chart | Source: SOL/USD on TradingView.com

Support and Recovery

During the downward movement, SOL approached the $85 support zone, akin to Bitcoin’s support at $40,000. Notably, the bulls successfully defended the 50% Fibonacci retracement level of the upward move from the $51.30 swing low to the $126.66 high, triggering a robust bullish reaction.

The price recovery ensued as SOL climbed back above the $100 level, facing resistance around $105, which corresponds to the 50% Fib retracement level of the correction from the $126.66 swing high to the $85.00 low.

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Crucial Breakout Pattern

The daily chart indicates the formation of a crucial breakout pattern with significant support at $85. This pattern, coupled with current price action and technical indicators, suggests the possibility of a minor decline from the $105 zone. The first major support is anticipated near $90, followed by the triangle trend line at $85. The primary support rests around the $80 zone or the 50-day SMA.

Potential Scenarios

  1. Downside Scenario:
  • A breach below the $80 support could trigger a more substantial correction, potentially leading SOL towards the $50 zone.
  • The bears need to overcome the robust support levels to establish control.
  1. Upside Scenario:
  • Solana bulls have the opportunity to defend $90 or $85, paving the way for a renewed upward trajectory.
  • Resistance levels at $105 and $110 must be surpassed for a clear bullish signal.
  • Breaking above $110 could fuel another rally, with targets set at $125 and $138.

Conclusion

Solana’s current position suggests a crucial juncture, with both bullish and bearish scenarios in play. The strong uptrend above $85 indicates potential for a fresh surge towards $125 or $138. Conversely, a failure to hold above $80 might expose the cryptocurrency to a more significant downside correction. Traders and investors are advised to closely monitor key support and resistance levels for clearer market direction.

 

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