Solana buy signals emerge, but can SOL break $78 resistance?
The Solana reclaim of the mid-channel level at $78 would be an indication of a potential rally toward $100.
Solana [SOL] is up 5.89% over the past week, but it remains within a deep downtrend. In 1 year, the price has been slashed by 57%. The low set at $60.13 on June 6 was the lowest SOL price since December 2023.
This downtrend can change bullishly, a popular crypto analyst remarked. The technical indicators favored a rally to $100, and a bullish breakout could commence if these signals are confirmed.
In other news, Solana’s Resource and Inclusion Fee proposal cleared the initial voting stage on August 4. If approved, it will increase the daily SOL burn from 650 to 9,000, a 14x increase.
The bullish breakout case for Solana
Popular analyst Ali Martinez wrote in a post on X that a SOL price target of $100 is feasible. There were multiple reasons why.
The TD Sequential flashed a buy signal on the daily timeframe. A move above the $78.7 resistance could set this bullish trend in motion. The MACD also formed a golden cross, indicating a shift in momentum.
Most importantly, the parallel channel price action was about to flip bullishly. Stronger demand could support a move toward $83 initially. A breakout beyond that resistance would then strengthen the case for an extension toward $98.
A rally to $98 might not alleviate the long-term downtrend’s pressure
The 1-day swing structure was bearish. Solana faced rejection from the 61.8% retracement level at $83, but has not sunk below $70. Instead, the past few days saw a bounce.
The OBV was unable to climb past its June highs, though it has made higher lows over the past week. Similarly, the A/D indicator has climbed slightly over the past month but has not established an uptrend.
Therefore, if demand returns, a rally to $98 would become likely. Yet, until this swing high is breached, swing traders and investors can maintain a bearish bias and sell the bounce.
Final Summary
- The Solana reclaim of the mid-channel level at $78 would be an indication of a potential rally toward $100.
- While momentum appears to have shifted on the daily timeframe, the volume indicators showed seller dominance.
