Solana’s (SOL) technical setup is hinting at a potential 1,600% rally for the decentralized finance (DeFi) asset amid a push to reclaim the $250 resistance level.
Currently, Solana is exhibiting a ‘cup and handle’ pattern—a historically bullish setup that often signals price breakouts, according to an analysis by prominent cryptocurrency on-chain analyst Ali Martinez shared in an X post on December 11.
This pattern indicates accumulation, with the rounded cup base reflecting consolidation as selling pressure eases and bullish momentum builds.
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For Solana, this base formed between late 2022 and early 2024, marking a period of recovery and strength. The handle, characterized by a shorter-term pullback, aligns with Solana’s recent price movements, consolidating around the $250 resistance level.
According to Martinez, the potential breakout sets the next target at around $4,000—a record high. The 1.618 Fibonacci extension supports this outlook, pointing to $2,236, while the 1.786 extension aligns closely with the $4,000 target.
Solana’s holding above the 0.786 retracement level of $123.44 also reinforces its underlying bullish momentum. However, the market expert did not provide timelines for when these price targets might be achieved.
By any measure, Solana reaching $4,000 is an ambitious target that would elevate SOL’s market cap to nearly $2 trillion. To put this into perspective, it would place SOL on par with Bitcoin (BTC) if the maiden cryptocurrency experienced minimal growth.
SOL’s hits double bottom
Meanwhile, Solana has faced bearish sentiments in the short term, aligning with the general market momentum. However, as noted by trading analyst CryptoBusy on December 11, SOL might have overcome this bearish momentum after forming a double-bottom pattern in the one-hour timeframe. This bullish reversal pattern suggests a possible breakout could be imminent.
If bullish momentum continues, the next targets for SOL are the 0.5 Fibonacci level ($225) and the 0.618 level ($230). A measured move from the breakout point could potentially add $10 (4.56%) to the price.
Solana’s potential breakout is further supported by on-chain metrics indicating increasing investor interest. For example, data from cryptocurrency intelligence platform DeFiLlama shows Solana’s daily trading volume surged from $2.92 billion on Saturday to $5.99 billion by Wednesday—the highest since November 20. Generally, such a spike reflects growing liquidity on the network alongside increasing investor interest.
On the other hand, regulatory developments surrounding Solana could also influence the asset’s price. The Securities and Exchange Commission (SEC) is highly anticipated to approve a Solana exchange-traded fund (ETF). Notably, outgoing SEC Chair Gary Gensler has reportedly rejected the Solana ETF, questioning the cryptocurrency’s status as a security.
Interestingly, the Solana community remains optimistic that the product will gain approval under the upcoming Donald Trump administration if crypto-friendly Paul Atkins is appointed to lead the SEC.
SOL price analysis
At press time, Solana was trading at $225.60, with daily gains of over 5%. However, SOL is down by nearly 3% on the weekly chart.
As Solana recovers from its recent short-term dip, there are bullish signals for both the short and long-term, such as SOL trading above the 50-day ($208.78) and 200-day ($166.37) simple moving averages.
With a 14-day relative strength index of 45.25 and moderate volatility at 5.47%, Solana has room for growth without entering overbought conditions, giving the asset a strong chance to end an impressive 2024 on a high.
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