Solana’s Bullish Momentum
Solana’s cryptocurrency (SOL) experienced a bullish surge on 25 May, propelling it above crucial multi-week trendline resistance. Often referred to as the “Ethereum killer,” SOL’s value had risen by 5% at the time of press, reaching a trading price of $20.45, as reported by CoinMarketCap.
Bitcoin’s Downtrend and Its Potential Impact on SOL
Despite Bitcoin’s (BTC) reclamation of the $27,000 level at press time, it remained in an overall downtrend on higher and lower timeframes. BTC’s failure to switch to a bullish trajectory by surpassing $27.4k could have implications for SOL’s bullish prospects.
Can Bulls Extend More Gains?
Investors and traders are eagerly anticipating whether the bullish momentum in SOL can continue, pushing its value even higher.
Key Support and Resistance Levels
All the significant support and resistance levels mentioned here are derived from the daily chart analysis. Notable among these are the following:
- The red/supply zone, ranging from $24 to $27, formed as a bearish order block (OB) on 20 February.
- The white zone, spanning from $19.7 to $21.2, represents a bullish OB created on 10 February.
- The lower support zone (cyan) ranges from $16.7 to $18.8, marked as a March swing low, and another bullish OB formed on 9 March.
Fibonacci Analysis and Price Momentum
The Fibonacci retracement tool is based on the recent swing high in mid-April and the subsequent lower low in May. As a result of this analysis, SOL’s price action has successfully breached the trendline resistance on both higher and lower timeframes, signaling a shift to uptrend momentum.
The 23.6% Fibonacci level, at $20.40, aligns with the bullish order block (cyan). However, for a stronger possibility of rallying further, bulls need to close above the 38.2% Fibonacci level, valued at $21.47. This could pave the way for a potential rally to the 50% Fibonacci level, sitting at $22.33, or even reaching the supply zone above $24. The realization of this scenario could also be influenced by Bitcoin’s momentum, should it turn bullish.
Conversely, if SOL fails to close above $21.2, it may face a scenario where its value hovers near $20.40, leading to a potential retest of the trendline resistance (blue line) or revisiting the March swing lows.
RSI and OBV Indicators
As of the press time, the Relative Strength Index (RSI) indicated that SOL was in the overbought zone, confirming the presence of strong buying pressure. Moreover, the On Balance Volume (OBV
