Key takeaways:
The Supertrend indicator for Solana (SOL) has issued a “buy” signal, historically leading to a price surge of 1,300%.
Resistance at $250 and overbought conditions indicate a potential retest of $220 for SOL.
Solana’s SuperTrend indicator signaled a “buy” on its weekly chart, a scenario that has typically heralded significant price increases.
Past signals generated gains of 620%-3,200% for SOL
The SuperTrend indicator displayed a bullish signal on Solana’s weekly chart last week, transitioning from red to green and moving below the price.
This indicator, similar to moving averages, overlays the chart and follows SOL’s price trend, employing the average true range to aid traders in identifying market movements.
Related: CoinShares reports resurgence in crypto inflows led by Bitcoin and Solana ETPs totaling $3.3B
In the 2021 bull market, previous confirmations from the indicator were linked to price surges of 3,200% and 620%, as illustrated in the chart below.
The last appearance of the “buy” signal was in July 2023, which preceded a 1,339% price increase, soaring from just above $20 to surpass $295 on January 19.
“The Supertrend will shift to green/buy if $SOL can close a weekly candle above $220.45,” noted analyst Dorkchicken in a recent X post, adding:
“Last time was in 2023, and the price surged from $39 to $294.”
The SuperTrend indicator shifted from red to green and dropped below the price as SOL crossed $220 on Wednesday.
If historical patterns hold, SOL might experience a substantial rally, potentially reaching $1,000, driven by increased demand from Solana treasury projects and the looming approval of spot Solana ETFs in the US.
Solana’s price rally has paused at $250
After a 60% uptick from the lows around $155 on August 2, Solana encountered resistance at $250, prompting profit-taking and buyer fatigue.
“$SOL is nearing its initial resistance zone,” commented analyst Crypto Seth on X as SOL approached $250. “We’ll see how substantial the pullback is.”
The relative strength index reached as high as 70 on the daily chart and 83 on the four-hour chart, indicating overbought conditions, which triggered a 7% correction from the eight-month peak at $250 down to around $237.
This market behavior created a descending parallel channel on the four-hour chart, as shown below. Key support for SOL resides within the $230 and $227 demand zone, marking the channel’s lower boundary and the 50 SMA.
Should the price slip below this, it might retreat to $220 before attempting another upward movement.
Despite the ongoing retrenchment, numerous analysts remain optimistic regarding Solana’s potential to surge to $300 and beyond.
“$SOL is demonstrating robust momentum,” Cipher X asserted in a Monday post, noting that the nine-weekly EMA crossing above the 15-weekly EMA confirmed the upward trend.
“The next liquidity target is positioned near $300, where buyers might aim for a breakout.”
As Cointelegraph highlighted, breaking through the $250-$260 resistance range will bring the next significant hurdle at $295 into play, fueled by increasing futures open interest and total value locked.
This article does not offer investment advice or recommendations. All investment and trading decisions carry risk, and readers are encouraged to conduct their own due diligence prior to making decisions.
