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

SEC Allegations and Impact on Solana

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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Dr. Olajide Samuel juggles the demands of medical studies with a passion for cryptocurrency. A seasoned blogger, Olajide shares his vast global knowledge of the crypto space, offering insights to enthusiasts. Despite his busy schedule, his commitment to crypto remains strong, and he actively seeks ways to contribute to its future.
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