Solana (SOL) price is poised for a massive surge after significant selling pressure was seen at the strong resistance level of $161. Over the past few days, SOL is down over 18% amid the overall bearish market sentiment and the recent Bitcoin (BTC) price drop.
Sign of trend reversal
However, the daily chart of SOL has formed a bullish divergence, signaling a potential trend reversal from a downtrend to an uptrend. Since early August 2024, SOL has formed lower lows, while the Relative Strength Index (RSI) has created higher lows.
The formation of bullish divergence on a daily time frame indicates a potential upward rally. Traders and investors see this as an ideal buying opportunity.
Solana Price Prediction
According to expert technical analysis, SOL is consolidating in a tight range near a crucial support level of $127. This support level has always been special for Solana. Since March 2024, SOL has revisited this level multiple times and each time it has seen a massive upward rally of at least 20%.
However, given the bullish divergence and historical price momentum, there is a high chance that SOL can rise by 20% to the $161 level.
On-chain metrics and market sentiment
According to on-chain analytics firm Coinglass, key liquidation levels are currently around $126.50 on the low end and $136.80 on the high end, as traders are overleveraged at these levels.
If market sentiment for SOL remains bullish and the price rises to $136.8, short positions worth almost $41 million will be liquidated. Conversely, if sentiment changes and the price falls below the $126.5 level, long positions worth approximately $115 million will be liquidated.
The higher long liquidation shows that bulls currently dominate the asset and have the potential to liquidate larger short positions.
At the time of going to press, SOL is trading around $134 and has seen a price increase of over 3% in the past 24 hours. Meanwhile, its trading volume has also increased by 65% in the same period, indicating higher participation amid a bullish outlook.
