SOL Trapped In A Descending Triangle - Can SOL Bulls Defend This Support and Target New All-Time High?

Solana, often termed as “Ethereum killer’ is currently trading at $165.395 which is a slight  0.58% gain in the last 24 hours. As seen in our recent report, SOL experienced a notable rally from a low of $118 on May 1 to a recent peak of $188 recorded on May 20. A 58% surge before facing resistance at a descending trendline.

As of writing, Solana market cap stands at $76.0 billion which makes it thel fifth largest cryptocurrency in terms of market cap. Interestingly, its trading volume has spiked by 66.28% in the last 24 hours totaling about $1.83 billion signaling a strong trading activity.

SOL Technical Analysis

Since the rejection at the descending trendline on May 20th Solana has encountered bearish market pressure, pushing the price lower at $162 support level. The question remains whether this support can withstand further declines or if the price will succumb to bearish dynamics potentially dropping lower to the untested demand zone and an ascending trendline that has been active since late November 2023.

If SOL’s price drops to the $145 mark, where the demand zone converges with a six-month ascending trendline, this market place could act as a strong support against further drops. On the other hand, if the bulls manage to hold above the $162 support then the next immediate  target would be at the descending trendline, followed by a potential surge toward the $200 mark if it manages to break out and close above it.

Zooming in on the 4 hour chart since the May 20 decline, Solana has been trapped inside a descending triangle, leaving investors speculating about whether a potential breakout or a break down on the cards next.

Looking further at the technical indicators, Solana strength is further highlighted by its position to key moving averages. In the daily chart, SOL trades above the 50-day EMA which is at $153,  the 100-day EMA at $158 and the 200-day EMA at $123.

The daily RSI stands at 51, indicating neutrality with enough range for movement in either bullish or bearish directions. The MACD has also experienced a crossover recently and the MACD line has dropped below the signal line reflecting a bearish market sentiment.

We further analysed the broader market sentiment towards Solana which appears optimistic and potentially gearing up for a bullish run. This optimism is backed up by on-chain metrics particularly the significant rise in the number of active addresses on the Solana network, which reached a 12 month high of 41.65 million in May 2024.

Also the inflow of new addresses has been remarkable after climbing from 12.49 M in Feb 2024 to 26.65 M in May 2024. This growth in active and new addresses suggests a growing interest in Solana which could translate into increased demand and upward price pressure.

Looking ahead at the forecast for this month June, SOL may prove to be a pivotal month for Solana. With its strong technical posture and promising on-chain indicators there is a tangible anticipation of reaching new heights. The active user engagement and growing network utilization serve as confluences of an impending bullish phase that could see Solana challenge its previous all-time highs.