Solana skips over a crucial selloff juncture: In April, the SOL price is expected to reach $150

The price of SOL has entered overbought territory, but bulls have shown in the past that they are unafraid of Solana’s exorbitant valuations.

Solana (SOL) has repeatedly soared through a key resistance level that had hampered its recovery attempts during the November 2021-March 2022 price correction, indicating that more upside is possible in April.

Solana turns a critical resistance into a source of assistance

 

To summarise, when SOL’s price tested its multi-month downward sloping trendline in recent history, it had significant pullbacks.

For example, two months after retracing from the indicated resistance level in December 2021, the SOL/USD pair plunged by 60%. In November 2021, it had plunged by over 40% in a similar retracement move sparked by a selloff around the trendline.

However, after breaking above the resistance trendline on March 30, Solana turned it to support (S/R flip), accompanied by an increase in trading volume, indicating traders’ confidence in the breakout move. As a result, the price of SOL increased by 25% to $135, putting the psychological resistance level of $150 within reach.

Why is SOL bullish (technically)?

 

SOL’s breakout move above its falling trendline resistance was accompanied by a bullish crossover of its two important moving averages: the 20-day exponential moving average (20-day EMA; the green wave) and the 50-day EMA (the red wave).

The technical indication known as the golden cross happens when an asset’s short-term moving average crosses above its long-term moving average. This crossover is regarded by traditional experts as a buying signal.

In addition to other fundamental and technical events, the 20-50 EMA crossover in August 2020 may have aided in propelling SOL’s price upward by more than 650 percent to over $267. As a result, the golden cross increases SOL’s chances of continuing its rise and breaking through the falling trendline barrier.

Divergence in the RSI

 

If a technical fractal revealed by Delphi Digital is to be believed, the upside potential becomes much more.

The price of SOL and the combination of its two technical indicators, the S/R flip and relative strength index (RSI) divergence, were found to be related, according to the crypto research business.

Notably, after a strong price increase — which saw it also break above the descending trendline support at the moment — Solana’s RSI jumped over 70, a “overbought” area, SOL tended to continue rallying despite its RSI settling lower or sideways.

In August 2021, for example, SOL soared 378 percent as its RSI broke above 70 for the first time. Similarly, Solana’s 268 percent upside move occurred during an overbought RSI phase in May-June 2021. Delphi Digital suggested that the fractals looked like SOL’s recent performance.

As a result, utilising Fibonacci retracement levels set between the $261 swing high and the $77.50 swing low, SOL/USD could continue its rise, with an interim upside objective of $147-$150.

A decline around or before reaching the $147-$150 price zone, on the other hand, might see SOL retest the $120 level as intermediate support, with a possible slide toward the 20- and 50-day EMAs.

 

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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