Solana has continued to fluctuate between bullish and bearish momentum with no definite break in a particular direction. Amid this, there have been retests of both resistance and support levels with no outcome, and this has contributed to the formation of a head and shoulders pattern. With this development, the Solana price is now looking in one of two possible directions, both of which could carry major implications for investors of the altcoin.
Solana Head And Shoulders Pattern Could Trigger Rally
Crypto analyst Melikatrader pointed out that Solana has completed a Head and Shoulders formation on its 1-Day chart. This formation can go either way, but for Solana specifically and how the price has performed recently, it could point to a more bullish movement than a bearish one.
After completing the left and right shoulders and the head, the price now looks toward the neckline as the next determinant. This neckline, as outlined by the crypto analyst, has been broken after the price crashed below the $160 level. What could happen next from here is that the Solana price could move upward to retest this neckline again. Being able to reclaim it would trigger an uptrend and kickstart a move toward $200.
There is also the trendline that suggests that the Solan price could be in an ascending trend. So far, there have been multiple higher lows, the presence of which is still bullish for the altcoin regardless of current market sentiment. If this holds, then the likelihood of an upward continuation becomes higher.
The analyst further explains that taking into account the head and shoulders formation and the neckline that was broken, it is more likely that the price shoots up from here. The target is placed at $219.84, as long as the momentum holds. Otherwise, there could be bearish implications for the cryptocurrency.
“Based on the pattern and technical analysis, the potential target for the price could be around $219.84, as indicated by the box in the upper right corner,” the analyst explained. “This target aligns with the upward trend continuation from the broken neckline.”
An inverse scenario would be a situation where the price fails to hold above the neckline. A reversal here could lead the Solana price to find better bounce-off points at lower support levels. Amid these, the $136.34 support level would be the one to watch in the case of a bearish scenario, as it would provide the most opportunity to buy.
Featured image from Dall.E, chart from TradingView.com
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