Solana announced its arrival into the top 10 cryptocurrencies on the back of a 70% surge in value from $43 to an ATH of $74.7. Such a sporadic rise in a short duration can sometimes lead to an instant plummet, but SOL bulls looked strong enough to support an extended run. Fibonacci tool was plotted on its 4-hour chart to highlight potential support and target levels moving forward. At the time of writing, SOL traded at $71, up by 13% over the last 24 hours.
Solana 4-hour Chart
Source: SOL/USD, TradingView
The Solana network, designed particularly for the creation of decentralized applications, recently launched the Wormhole upgrade which offers integration between different types of blockchains on its network. This may have been the primary trigger for SOL’s staggering hike in value.
On the charts, the alt faced no hiccups rising above $44.2 resistance- an area which had previously limited multiple breakout attempts in June. The alt formed a new ATH at its 50% Fibonacci Extension and additional targets lay at the 61.8% ($77.55) and 78.6% ($81.9) Fibonacci Extensions. In case of a pullback, support found anywhere above the 23.6% Fibonacci Extension would allow SOL to maintain its bullish narrative.
Reasoning
There was an exuberant amount of buying pressure in the market and this was highlighted by the Awesome Oscillator, which traded at levels never seen before. However, some signs did suggest that bulls could take a breather before the next upcycle. The Directional Movement Index’s +DI converged slightly after a sharp divergence- which meant that SOL’s uptrend lost some steam. The RSI’s overbought nature also warranted stabilization.
Conclusion
High volumes and sustained buying pressure would continue to push Solana north over the coming sessions, but there were some signs of exhaustion in the market. If prices do take a southbound direction, support can be found at the abovementioned Fiboancci levels. This would also allow traders to go long in case they have missed out on the current rally.
