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The correction of the cryptocurrency market on Sunday evening again caused the price of Solana to drop to a level that is critical for price action in the coming weeks. According to NewsBTC, SOL has been forming an uptrend line on the 1-day chart since the end of December last year, which could bring the price back into bullish territory.
Already in the last few days, Solana’s price tested the trend line (black) before a decent bounce up occurred. However, yesterday’s price action pushed SOL back to the trend line. However, as the 4-hour chart shows, SOL showed strength and remained above the trend line.
Solana price, 4-hour chart | Source: SOLUSD on TradingView.com.
The pullback also reset the Solana Relative Strength Index (RSI) on the 4-hour chart. As the RSI is near the overbought zone at 68, there has been a healthy pullback to 41. Thus, the 4-hour chart continues to look bullish.
A look at the hourly chart continues to show the same strong picture. It is important for SOL bulls to close above the $22 level today to stay above the trend line. If successful, the bulls could once again break through the resistance at $22.78 ahead of the big test: the 200-day exponential moving average (EMA) (blue).
Solana holding above trendline, 1-day chart | Source: SOLUSD on TradingView.com.
Solana has already dropped below the bullish line on April 8, 2022, which technically means it is still in bearish territory. The collapse of FTX and the difficulties is certainly one of the reasons why SOL is still undervalued compared to other altcoins.
While many altcoins are already trading above the 200-day EMA, the indicator remains the most important target for Solana. However, this will most likely require a new rise in the cryptocurrency market in general, especially in the leading cryptocurrency Bitcoin.
As soon as the 200-day EMA drops, Solana’s yearly high at $27.13, which also hosts the 38.2% Fibonacci level, comes into focus. Subsequent Fibonacci levels will be $33.06 (50% Fibonacci), $39.14 (61.8% Fibonacci), and $47.81 (78.6% Fibonacci).
Notably, Solana’s current strength is also visible on the SOL/BTC chart (single-day chart). SOL is on the verge of breaking out of the descending parallel channel that has been defining Solana’s trend since mid-January.
SOL/BTC Daily | Source: SOLBTC on TradingView.com.
Bullish news for Solana
Last Friday, payment giant Mastercard announced that it was working with several Tier 1 projects to create common standards. Solana is among them. In addition, Mastercard has chosen blockchains: Ethereum, Aptos, Polygon and Avalanche. The Solana Foundation commented via Twitter:
The Solana Foundation is excited to work with Mastercard on tools to validate trusted communications and help ensure secure communications between web2 and web3 applications. This is a positive step forward in building trust in untrusted environments for consumers, businesses and larger organizations.
At #consensus23, we announced how we are instilling trust in the blockchain ecosystem through Mastercard cryptocurrency Credential. With cryptocurrency wallet providers @Bit2Me_Global, @LiriumAG , @MercadoBitcoin and @upholdinc and public blockchain network organizations @AptosLabs,… pic.twitter.com/P33mtDVAas
— Mastercard News (@MastercardNews) April 28, 2023
Featured image from Exodus wallet, charts from TradingView.com