Solana retraces back to the $170 threshold but is forming a bullish flag with targets between $380 and $830, according to an analyst.
On Tuesday, Solana (SOL) reached a significant milestone by surging above the $180 mark, marking its highest level in three months. However, at press time, SOL had returned to the $170 region.
Yet, Solana continues to trade with a notable 14% gain in its monthly performance, reflecting positive market sentiment that aligns with Bitcoin’s rise toward its historical all-time high. In this growth phase, an analyst closely monitors Solana’s performance for further uptrend.
Solana Bullish Patterns and Targets
The analyst, known as Xanrox, has observed the formation of a bullish flag pattern in Solana’s recent price movement. This pattern typically suggests further upward momentum. According to Xanrox, this pattern serves as a continuation signal, indicating that the consolidation phase on the 3-day chart is likely temporary.
From an Elliott Wave perspective, Xanrox noted that Solana’s wave (3) delivered a remarkable 2,600% gain last year, suggesting the potential for more upward movement following wave (4). As Solana aims to complete wave (5), the analyst anticipates a potential gain of 100% to 400% by the end of the year.
Targets and Potential Pullback
From the Fibonacci perspective, the analyst noted that the initial target is set at $383.39, corresponding to the 0.382 Fibonacci retracement level, representing a 119.9% increase from the breakout point. A more ambitious second target of $829.17 aligns with the 0.618 Fibonacci level, indicating a potential gain of 372.77%.
Meanwhile, in a follow-up analysis, Xanrox noted that while Solana remains bullish overall, some weakness is visible on the 4-hour chart. This suggests a possibility of a short-term pullback, with a potential retest of the $147 level before making a move toward a new all-time high.
Overbought Signals Appear
Additionally, despite the ongoing bullish momentum, technical indicators suggest caution. Solana’s Relative Strength Index (RSI) and the Stochastic Oscillator indicate overbought conditions, signaling a possible price correction.
With a current value of 71, the RSI is in the overbought zone, typically suggesting potential for a reversal or pause in the uptrend. Similarly, the Stochastic Oscillator at 81.2 also indicates that the current price is close to its two-week high, increasing the probability of a pullback.