Renowned crypto analyst Josh Olszewicz recently highlighted an extremely bullish technical pattern for the Solana (SOL) price, indicating a potential significant uptrend for the cryptocurrency against the US Dollar (SOL/USD). Olszewicz shared his analysis on X (formerly Twitter), with the comment: “SOL iHS warning. Graph is the graph, love it or hate it. Looks a lot better than spot ETH, that’s for sure.”
Solana ready for a rally of more than 50%?
After reaching a peak of $260 in November 2021, Solana price experienced a sharp decline in value, plummeting to a low of $8 in late 2022. This decline reflected the general downturn in the crypto market, which was exacerbated by the collapse. of the crypto exchange FTX, with SOL in particular being affected.
However, 2023 started on a positive note for Solana. The price of SOL recovered from a low of $8 to almost $26 in the first half of January, paving the way for the formation of an inverse head-and-shoulders (H&S) pattern.
This inverse H&S pattern, recognized as a typical bullish reversal signal, began taking shape in mid-January and lasted until October 2023. By mid-March, the left shoulder was clearly visible, with the head forming in early June and the right shoulder taking shape in early June. prominently in October.
A key feature of this pattern is the neckline resistance, which is around $25.81. Solana’s price has already challenged this resistance several times, and a decisive break above this threshold would serve as a strong indicator of a bullish trend reversal. Olszewicz in his analysis marked the stop loss (SL) for this trade idea just below the right shoulder, specifically around $19.30.
Using Fibonacci extensions, Olszewicz mapped out potential price trajectories for SOL should it successfully cross the $25.81 neckline. The targets are marked at the Fibonacci levels 1.618 ($33.85) and 2.0 ($38.82). If these predictions are correct, traders may be looking at potential profits between 35% and 55% of the current price.
VPVR supports this thesis for SOL
Additional insights from the Volume Profile Visible Range (VPVR) show that the most substantial trading activity for SOL is around $14 to $15. Another volume cluster is between $20.83 and $19.30, corresponding to Olszewicz’s stop loss placement.
Another key takeaway is that if the SOL were to break above the neckline of the inverse H&S pattern, it would create a large volume gap up to the first price target at $33.85, where the Fibonacci level of 1.618 is located, indicating that this area is of significant interest and potential resistance.
In conclusion, while the emergence of the inverse H&S pattern paints a super bullish picture for Solana’s price trajectory, it is essential to wait for a confirmed break above the $25.81 neckline, ideally supported by substantial trading volume, before the bullish projections from Olszewicz are confirmed.
At the time of writing, the SOL rose above the 200-day EMA and traded at $23.81.
Featured image from Shutterstock, chart from TradingView.com
