The Solana (SOL) cryptocurrency is currently positioned within a significant supply zone, following substantial declines over the past 48 hours. These declines have impacted the entire crypto ecosystem. Despite this, technical analysis suggests that Solana’s price is poised for a massive breakout, which could see its price and market cap surge by an astonishing 1,700% in the foreseeable future.
Cup and Handle Pattern Signals Bullish Momentum
The bullish outlook for Solana is underscored by the presence of a cup and handle pattern, a classic technical formation known for indicating strong bullish breakouts. This pattern is characterized by a rounded bottom (the cup) followed by a smaller dip (the handle), and is often considered one of the most reliable indicators in technical trading.
Development of the Cup and Handle Pattern
In the case of Solana, the development of this pattern has been ongoing since 2022, spanning various market cycles. The cup phase began forming during the onset of the 2022 bear market and persisted throughout the extended downtrend. This phase also encapsulates the consolidation period in early 2023 and the subsequent rally in the latter half of the year. Collectively, these movements shaped the rounded bottom of the cup, with the latter rally marked by a breakthrough above five successive Fibonacci (Fib) extension levels.
Crypto analyst Ali Martinez’s analysis, shared on social media platform X, highlights that Solana is currently in the handle phase, which has been developing over the past eight months. Recent price action has seen Solana peek above the neckline of the cup and handle pattern, culminating in an all-time high of $263 on November 23. However, a correction phase followed this peak, with prices dipping to a recent low of $205.
Implications for Solana Price
The recent all-time high observed on November 23 coincides with the 1.00 Fibonacci extension level, drawn from the 2022 bear market low of $8. This low point serves as the base for the cup and handle pattern.
Technical Analysis and Price Predictions
Despite the correction that has followed the all-time high, Solana’s price is currently retesting the breakout level of the neckline for the cup and handle pattern. Such retests are commonplace in cryptocurrency markets, particularly after breaking through long-standing resistance levels. With this in mind, Martinez forecasts a bounce at the neckline, potentially leading to a resumption of the uptrend.
Martinez envisions a scenario where Solana breaks above the next four Fibonacci extension levels, culminating at the 1.786 Fib extension. Should this trajectory unfold as projected, it would propel Solana’s price beyond multiple psychological thresholds, ultimately surpassing $4,000 at the 1.786 extension level. This would represent a remarkable 1,700% increase from Solana’s current price.
As of the present moment, Solana is trading at approximately $219.
