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Solana Fractal That Preceded 1,1111% Rally Is Now Flashing Again

By:
Yashu Gola
Published: Jun 25, 2024, 15:48 GMT+00:00

Key Points:

  • Solana (SOL) is showing signs of a possible 68-70% price rally, echoing a similar fractal pattern from 2021.
  • The descending triangle pattern and support from the 50-week EMA suggest a bullish breakout, targeting around $233.
  • Solana’s TVL has surged to its highest since October 2022, indicating growing adoption and investor confidence.
Solana rocket taking off, FX Empire

In this article:

The recent Solana (SOL) price action has been a rollercoaster for investors. After hitting an all-time high of around $203 in March, the cryptocurrency has seen a dramatic 40% drop. While this might seem gloomy, there’s a silver lining on the horizon. An intriguing pattern from 2021, identified by independent market analyst Jelle, suggests that Solana could be gearing up for a powerful bullish comeback in the coming months.

Solana Fractal Hints At 68-70% Price Rally Ahead

Solana is repeating a market trend from 2021 that preceded a circa 1,111% price rally. This fractal has raised the possibility for SOL to undergo a similar—if not the same—uptrend in the coming months.

Notably, SOL’s price is consolidating inside a descending triangle pattern similar to the one in the April-September 2021 session. Moreover, the cryptocurrency’s ongoing consolidation accompanies strikingly similar indicators from the said period, namely the weekly relative strength index (RSI) that is forming lower highs and the 50-week exponential moving average (50-week EMA; the red wave) serving as support.

SOL/USD daily performance chart. Source: TradingView

The fractal pattern observed from April to September 2021 triggered a massive rally in Solana’s price. According to market analyst Jelle, the current market conditions are strikingly similar to those during the previous rally, suggesting that history might repeat itself. If these conditions persist, the market could respond in a similar fashion, potentially leading to substantial gains for Solana once again.

As of June 25, SOL was bouncing after testing the support confluence comprising the descending trendline’s lower trendline and the 50-week EMA—at around $125. In doing so, the cryptocurrency is eyeing a run-up toward the triangle’s upper trendline at around $155-160—up by approximately 30% from the current price levels—by July.

Given that SOL’s descending triangle has formed following a strong bull run earlier in the year, the likelihood of breaking above the pattern’s upper trendline is high, which is in line with the typical behavior of descending triangles during uptrends.

Source: X

According to technical analysis principles, a descending triangle breakout usually resolves when the price reaches a level equal to the maximum distance between the triangle’s upper and lower trendline. This suggests that SOL’s potential upside target could be around $233, marking a 68% increase from its current price.

Solana TVL Climbs to October 2022 High

Solana’s bullish fractal setup accompanies a consistent growth in its network usage, as tracked by the total-value-locked (TVL) across its ecosystem.

Notably, as of June 25, Solana’s ecosystem had 31.11 million SOL deposited, the highest since October 2022. This represents a circa 300% jump in the TVL this year and around 350% from its local low of around 9 million SOL in November 2023.

Solana’s TVL performance. Source: Defi Llama

A higher TVL suggests more users and developers are utilizing the Solana network, indicating increased demand for the cryptocurrency. Meanwhile, the rising TVL can boost investor confidence, demonstrating the network’s robustness and growing adoption. Positive sentiment often translates into higher buying interest, pushing the price up.

Overall, the growth in TVL supports the bullish fractal setup, reinforcing the technical indicators that predict a potential price rally.

About the Author

Yashu Gola is a journalist focusing on cryptocurrency markets since 2014. He writes for Cointelegraph and CoinChapter and has previously served as the chief editor for NewsBTC.

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