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Solana (SOL) about to jump by 35 percent? Two indicators turn bullish

 


At least two technical indicators are suggesting that Solana ( SOL ) could stage a strong rebound in June despite SOL/USD being down 78.5 percent year-to-date.


SOL price about to break out of bullish wedge

Solana has been forming a " falling wedge " since May . Its fluctuations within two descending and converging trend lines confirm this. Traditional analysts view falling wedges as bullish reversal patterns. These resolve when price breaks above the upper trendline.

The profit target of a falling wedge is higher by the maximum distance between the upper and lower trend lines, measured from the breakout point. So SOL would rise by around $20 as shown in the chart below.

That puts SOL's price target at $58 based on current prices. That's an increase of about 35 percent. However, if the price pulls back after testing the upper trendline of the wedge and stays within its range, SOL's profit target would fall further.


Solana token can rally to at least $44 after breaking out of its wedge pattern.

Further evidence of a breakout comes from the increasing disconnect between price and momentum trends.


The recent declines in SOL coincide with an upside retracement in the RSI. This indicates whether an asset is overbought or oversold.


This situation is also known as "bullish divergence" and shows that the bears are losing control and the bulls are gradually gaining the upper hand.


Further downside risk on Solana

Analyst Tom Bulkowski believes falling wedges are bad bullish indicators. According to him, the chance of breaking even is 26 percent. The chance that a falling wedge will reach its profit target is 64 percent. Therefore, Solana could also continue its downtrend.

Bulkowski also says:


"The only variant that works well in a bear market is a dip to the downside."

Solana's fundamentals point to a downtrend. The US Federal Reserve's tightening monetary policy and its impact on cryptos and stocks is an example of this.


As a result, SOL could become under pressure and face a drop to between $25 and $19.

This range acted as strong support between May and July 2021.

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