The daily chart of Solana (SOL) is a textbook example of the cup-and-handle pattern, which typically leads to strong upside flows. The structure of this technical set-up materialized as SOL consolidated a bottom formed from March through November and then eventually broke out of the resistance at $212.36.
A brief handle-formed retracement followed the breakout as LINK recovered and settled at $226.78, a point of major support resting at the 0.236 Fibonacci retracement level that mirrors the most recent low.
If the cup were taken from the little cup, it might show that the SOL price target is +/- $313.46 in a 47% rally. This is in line with the 2.0 Fibonacci extension level, one of the most common points for predicting longer price moves.
Further encouragement can be derived from the fact that the relative strength index (RSI) is at 61.335. SOL has plenty of room to run prior to becoming overbought; hence, greater double-digit gains seem possible if a new uptrend is underway.
Uptrend Supported By CONSTRUCTIVE MARKET ACTIVITY
Further supporting the bullish story, Solana has seen strong investment flows. Spot inflow data for December 5 showed a life gain of $1.19 billion, up from the outflow of $1.13 billion, leading to a positive net inflow. The increase in buying pressure points to continued buyer attention as SOL hovers around $239.25.
On the upside, however, the Open Interest (OI) Weighted Funding Rate for Tesla Fuel is still quite optimistic as it sits at 0.0653%. The metric, which indicates a premium on longs per trader basis, shows continued high confidence in SOL’s ability to rise.
Experts’ Views about Bitcoin and Solana Potential
Raoul Pal, a popular market analyst and the co-founder of Real Vision, also took to social media today to express his thoughts on Solana in the long run. Pal, describing SOL’s weekly chart as “the classic of the powerful bullish,” pointed out that a breakout above its present resistance could cause the price to rocket higher.
Analysis by Pal pointed towards a multi-year consolidation phase; however, SOL was inching closer to an important resistance level at $260, the very area where its earlier all-time high levels lay.
Moreover, the token is breaking out of a falling wedge pattern too, which is another bullish sign. At this point, if SOL can break $260 decisively, it would become quite probable that it will reach all-time highs and maybe even higher.
One such trader that shares this sentiment is the famous Astekz, who recently referred to movements in SOL as “literally one of the most delicious setups I’ve had hands down in my entire trading career.”.
The charts by Astekz reveal a breakout after a long consolidation phase and the token retaking the $260 resistance. He expects this trend to continue, which, of course, could potentially take the price well above $300.
Traders / Investors Takeaways
Given the state of Solana’s technicals and the overall market, this is a very interesting choice for any trader interested in profit. This growth in SOL sentiment was confirmed when the cup and handle pattern was completed along with the strong entry of funds into the market, rebuilding some of their long positions by interest-paying exchanges.
Although risks are still present in any market, the signals indicate that Solana may continue its upward trend in the short term. If the token breaks through its resistance at $260, it could open the door to a wider rally and will be one to pay attention to in the coming weeks.
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