Solana Price Correction Amidst Spot Bitcoin ETF Uncertainty
The Solana ($SOL) price has recently experienced a significant correction amid the uncertainty surrounding the approval of a spot Bitcoin ETF. Over the last two weeks, the coin’s value dropped by approximately 25%, moving from a new local top of $126.36 to its current trading position at $94.58.
However, a closer look at the daily time frame chart reveals the formation of a bullish Flag pattern during this correction, suggesting that the asset is poised for a rebound towards higher targets.
Flag Pattern Indicates Potential Recovery
A healthy retracement to 38.2% Fibonacci level indicates that the overall trend for this asset remains bullish. The formation of a bullish Flag pattern suggests that a breakout from this pattern could signify the end of the correction phase.
- The 24-hour trading volume for Solana is $3.3 Billion, reflecting a 12% gain.
- The parabolic growth in Solana entered a new correction phase after reaching $126 in late December.
- The recent pullback brought the price to a low of $85, aligning with the 38.2% Fibonacci retracement level.
The steady lower-high, lower-low formation in the daily time frame indicates the formation of a bullish reversal pattern known as FLAG. This suggests that the ongoing retracement may be a temporary pullback, preparing buyers for the next upward movement.
According to the Fibonacci extension, the spot-breakout rally could potentially surge the altcoin by 58%, reaching a target of $152.
SOL vs BTC Performance
Over the past three months, both Solana and Bitcoin have exhibited bullish price trends. However, a notable difference is observed in their recovery patterns. Solana (SOL) demonstrated a more vigorous recovery with significant retracements, favoring pullback trading strategies. In contrast, Bitcoin displayed a steadier and more gradual upward trend, suitable for breakout trading strategies.
Exponential Moving Average (EMA): The 50-day EMA is expected to continue providing pullback support to buyers.
Moving Average Convergence Divergence (MACD): A bearish crossover between the MACD and signal indicates no sign of reversal yet in SOL from a price perspective.