A trading expert has identified a technical setup that could see Solana (SOL) target the $4,000 mark as the decentralized finance (DeFi) asset continues to establish its price above the $100 support zone.
According to Ali Martinez, Solana has the potential to surge by a staggering 2,900%, pointing to the formation of a cup and handle pattern as a strong indicator of a bullish trend, he said in an X post on March 14.
Martinez noted that since November 2021, Solana has experienced a U-shaped decline, followed by a level-off phase, which is now evolving into the pattern’s “handle.” This technical formation is often seen as a precursor to a major upward movement in price.
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The cup and handle pattern is bullish, where the price forms a rounded bottom (the cup) followed by a consolidation phase (the handle). A breakout above the resistance level signals a potential rally. Martinez suggested that Solana could break the $200 resistance, paving the way for a surge toward $4,000.
He emphasized that if the cryptocurrency can decisively break above the $200 mark, the odds of a continued bullish rally increase significantly.
In this case, a $4,000 valuation would likely elevate Solana to the highest-ranked digital asset with a market cap exceeding $2 trillion, provided Bitcoin (BTC) stagnates during this period.
Meanwhile, another analysis by Ted Pillows in an X post on March 14 also stressed the significance of Solana holding the $110 level, as dropping below this mark could usher in a sustained correction for SOL.
The expert stated that Solana stands at a key juncture, considering its retest of a multi-year support zone and a long-term uptrend line. Historically, these levels have provided strong buying opportunities.
He highlighted the importance of the $110 to $120 zone, noting that failure to hold support could open the door for a deeper correction of 30% to 40%. However, a successful bounce could signal a reversal, with a potential upside if bullish momentum returns.
Solana price fundamentals
Although technical indicators are crucial to Solana’s next price trajectory, other fundamentals are also coming into play, with the spot exchange-traded fund (ETF) ranking as a key factor. Several entities have already applied for the product with the Securities and Exchange Commission (SEC).
To this end, on March 11, the SEC postponed its decision on multiple altcoin ETFs, including those for XRP, Solana, Litecoin (LTC), and Dogecoin (DOGE). The agency extended its review period, pushing decisions on Grayscale’s XRP ETF and Cboe BZX’s Solana ETF to May.
Notably, Bloomberg ETF analyst James Seyffart called the delay “expected,” noting that final deadlines extend until October. Fellow analyst Eric Balchunas added that other ETF proposals, including one for Ethereum (ETH) staking, were also delayed.
The SEC has previously extended crypto ETF decisions amid leadership changes following Gary Gensler’s exit from the regulator.
Although part of Solana’s momentum last year was driven by meme coin activity on its network, an ETF approval could help broaden SOL’s appeal and attract long-term investors.
On the other hand, a proposal to slash Solana’s inflation rate by 80% (SIMD-228) failed to pass after falling short of the required 66.67% approval. Despite securing 61.39% “Yes” votes, opposition from smaller validators tipped the balance, keeping SOL issuance unchanged.
The decision could lead to short-term selling pressure, as lower inflation would have reduced token supply, potentially driving up SOL’s price. However, higher rewards may sustain validator participation and network security, a long-term positive.
SOL price analysis
As of press time, Solana was trading at $134, well below its 50-day ($183.93) and 200-day ($186.79) moving averages (MA), signaling a strong downtrend.
The asset’s market sentiment remains bearish, with the Fear & Greed Index at 27 (Fear). However, the 14-day relative strength index (RSI) stands at 35.38. SOL must reclaim $150 and break above key resistance levels to reverse the bearish trend. Until then, downside risks remain in play.
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