[ad_1]
Bullish breakouts above the 21D EMA have happened two times already in the past and they have not yielded the expected outcome and have turned out to be bull traps.
However, as this breakout occurred in a value area (high volumes), the odds that it may lead to a strong recovery for SOL are higher than usual.
Momentum indicators are also favoring a bullish outlook as the Relative Strength Index (RSI) jumped above its 14-day SMA, meaning that the uptrend has been gaining strength.
Similarly, the MACD’s histogram has been on an uptrend in the past 8 days as the price has been progressively climbing.
SOL has now hit a key resistance at $135. This price area has been its point of control (POC) throughout the year.
This means that the highest trading volumes have occurred in this range between $130 and $145. Hence, whatever happens next could provide a strong signal of where the market could be heading next.
What Solana needs at this point is a clean break above the $150 level as this would push the token to an area with much lower volumes where bulls will encounter little resistance to push the token much higher.
However, selling volumes have been strong at current levels. This increases the odds that the price could reject a move above the $135 area again.
A break below the 21D EMA would confirm a bearish outlook as this has been a strong signal in the past two instances that the bullish breakout was a false positive.
If that happens, it seems highly likely that SOL will retest the $100 level as this is the nearest area of support that has encountered strong buying volumes.
[ad_2]
