Solana (SOL) price has been on a free-fall since December 03 shedding approximately 39% towards the range low at $149.173. The appearance of an engulfing the bullish V-shaped chart pattern on the daily chart points to a possible upswing towards $244. At the time of writing, Solana price is exchanging hands at $178.
Solana price V-Shaped Recovery Aims For 38% Upswing
SOL price has spelt out a V-shaped chart pattern on the daily chart, indicating a sharp recovery. A V-shaped pattern is created when an asset falls significantly and then makes a sustained upswing. Although, Solana’s recovery may not be as sharp as a V-shaped recovery would suggest because it has been consolidating below the 100-day Simple Moving Average (SMA) since December 16. But the technical outlook suggests that Solana price may continue the uptick and complete the V-shaped recovery.
As such, if SOL price breaks above the 100-day SMA at $185 it may rise to tag the December 02 range high around $244, representing a 38% rally from the current price.
But before reaching this target, Solana bulls have to overcome significant resistance posed by the 200, psychological level, 50 SMA at 208 and the $221 major resistance level.
The bullish narrative has been reinforced by a buy signal from the Moving Average Convergence Divergence (MACD) indicator. This occurred when the 12-day Exponential Moving Average (EMA) crossed above the 26-day EMA earlier on December 18. Note that the bullish momentum will gain more traction as soon as the MACD crosses the zero line into the positive region.
SOL/USD Four-Hour Chart
The strength of the bullish momentum is also illustrated by the Relative Strength Index’s (RSI) movement away from the oversold areas. A break above the midline will initiated more buy orders that are expected to propel Solana price towards the target of the prevailing chart pattern before overbought conditions come into play.
Looking Over the Fence
On the flipside, a daily closure below the immediate support at $173 may trigger massive sell orders triggering another downswing. If this happens, Solana price could re-test the support at $161 and the December 13 range low at $149.
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