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Solana Rate eyes 36% Rally as 2 Technical signals flip bullish

08-Jun-2022 By: Somesh Gaur
Solana Rate eyes 36%

Solana Rate eyes 36% Rally as 2 Technical signals flip bullish

Technicals show that Solana nearly 80% year-to-date loss will be followed by some relief rallies.

Even after the SOL/USDT pair's 79 percent year-to-date drop, at least two technical indications suggest Solana (SOL) could see a dramatic price recovery in June.

The price of Solana is approaching a bullish wedge breakout.

First, since May, Solana has been painting a "falling wedge," as evidenced by oscillations within two descending, converging trendlines. Falling wedges are considered bullish reversal patterns by traditional analysts, as they resolve whenever the price breaks above their upper trendlines.

The profit objective of a falling wedge is calculated by adding the maximum distance between its upper and lower trendlines to the breakout point, according to technical analysis. As a result, depending on SOL's breakout level, the stock's price might jump by $20.

If assessed against the current price, the SOL's price target is $59. This is a 36 percent increase. However, if the price falls after testing the wedge's top trendline and continues to vary within its range, SOL's profit objective will fall.

Bullish divergence

An increasing gap between Solana's price and momentum patterns provides more positive signals.
SOL's recent downside swings have been accompanied by an upside retracement in the daily relative price index (RSI), a momentum oscillator that detects an asset's overbought (>70) and oversold (30) states. This position, also known as "bullish divergence," indicates that bears are losing control of the market and that bulls will reclaim power.

Solana still faces bearish dangers, according to financial market veteran Tom Bulkowski. Falling wedges, on the other hand, are poor bullish signs, with a greater breakeven failure rate of 27%. Meanwhile, a falling wedge has only a 63% chance of hitting its profit target, leaving Solana with the option of continuing its downward trajectory.

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