Key Points:
The Solana SuperTrend indicator has issued a "buy" signal, which historically has led to a price increase of 1,300%.
The $250 resistance level and overbought conditions indicate a risk of SOL retracing to $220.
The SuperTrend indicator for Solana (SOL) has issued a "buy" signal on its weekly chart, a historical event that typically signals explosive price increases.
The weekly chart for Solana shows that last week the SuperTrend indicator changed from red to green and is positioned below the price, issuing a bullish signal.
This indicator is similar to moving averages, overlaid on the chart, and tracks the SOL price trend by incorporating the Average True Range (ATR) to help traders identify market direction.
During the 2021 bull market, after the indicator confirmed several times, SOL experienced significant increases of 3,200% and 620%, as shown in the chart below.
The last time the SuperTrend issued a "buy" signal was in July 2023, after which SOL skyrocketed 1,339% from just above $20, reaching an all-time high of $295 on January 19.
According to analyst Dorkchicken's post on the X platform last week, if $SOL can close above $220.45, the SuperTrend will flip to green/buy. He added:
When SOL broke through $220 on Wednesday, the SuperTrend indicator changed from red to green and is positioned below the price.
If history repeats itself, SOL could see a significant increase, potentially reaching $1,000, driven by growing demand in the ecosystem's liquidity pools and the possibility of the approval of a U.S. spot Solana ETF.
Since the low of $155 on August 2, Solana has risen 60%. However, it faced resistance at $250, primarily due to profit-taking and weakened buying pressure in the market.
Analyst Crypto Seth stated on the X platform on Sunday: "$SOL is approaching the first resistance zone." At that time, the price was near $250. "We'll see how much of a pullback there will be."
On the daily chart, the Relative Strength Index has risen to 70, while the four-hour period has reached as high as 83, indicating that the market is in an overbought state. As a result, SOL has retraced 7% from its eight-month high of $250 on Sunday and is currently hovering around $237.
As shown in the chart below, the price action on the four-hour chart has formed a descending parallel channel. The important support areas for SOL are in the $230 and $227 demand zones, corresponding to the lower edge of the channel and the 50-period SMA, respectively.
If it breaks below this range, the price may test $220 before attempting to rebound.
Despite the current pullback, many analysts remain optimistic that Solana could continue to rise to $300 and beyond.
According to Cipher X's post on the X platform on Monday: "$SOL is showing strong momentum." He added that the 9-week EMA has crossed above the 15-week EMA, confirming an upward trend.
According to Cointelegraph, if it breaks the $250-$260 resistance zone, the next significant resistance will be at $295, at which point the increase in open interest and total locked value will become major driving forces.
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Original: “Solana Confirms Bullish Signal, Last Time 1300% SOL Price Gains”
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