Several buy signals have surfaced for Solana. If buy orders increase, SOL could see a significant rally going forward.
Buy signal for Solana
Solana appears to be preparing for a major upside despite the recent downturn in the crypto market.
After a massive rally for much of 2021, SOL has had a tough few weeks. It is currently trading around $109, down more than 58% from its all-time high of $260 set on March 11.
The SOL appears to be trading in oversold territory, suggesting that a local bottom may be forming. The Tom DeMark (TD) Sequential Indicator is forecasting a bullish outlook as it is currently providing buy signals on the 3-day and weekly charts of Solana. Bullish formations are developed in the form of 9 red candles: if there are 9 consecutive candles with a lower closing price than the previous 4 candles, there is a high probability that the trend will reverse.
An increase in buying pressure around the current price level could help confirm the TD Sequential indicator’s thesis. In such cases, Solana can rally to the 50-3-day MA at $180. A break of this key resistance area can propel SOL higher as the next key supply wall lies around $200.
Source: TradingView
However, it is worth noting that Solana could tumble lower before the upside potential is met. The 100-3-day MA and 50-week MA are currently hovering around $100, suggesting that this is the most stable demand barrier on the downside. Any downtrend towards this support area could encourage marginal investors to return to the market and act as a bullish catalyst.
However, it remains to be seen if the $100 support will hold. A decisive close above this level could spell trouble and invalidate the bullish outlook. The SOL could then continue the downtrend to $82 or even $66.
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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