Analyst Identifies Crucial SOL Levels to Monitor as Solana Creates a Bullish Megaphone Pattern

Despite a capital outflow in the overall crypto market, an analyst has highlighted the positive sentiment surrounding Solana (SOL), a decentralized finance (DeFi) asset. Ali Martinez, in a recent post, pointed out that Solana is showing signs of a bullish megaphone pattern on its four-hour chart. This pattern, characterized by higher highs and lower lows, indicates increasing volatility and the potential for a bullish breakout.

Martinez emphasized the significance of the 61.8% Fibonacci retracement level, which SOL recently corrected. This level, around $161.92, is seen as a critical support zone, suggesting a potential rebound.

The Relative Strength Index (RSI) on the four-hour chart also indicates oversold conditions, further supporting the idea of a potential price reversal. An oversold RSI often suggests a decrease in selling pressure and the possibility of a rebound.

Based on Martinez’s analysis, traders may consider the current dip in SOL’s price as an opportunity to buy. To manage risk, he suggests setting a stop-loss between $156 and $154, just below the current support level. He also sets a take-profit target between $200 and $259, aligning with the upper boundary of the bullish megaphone pattern and the 1.272 and 1.414 Fibonacci extension levels.

Initially, Martinez had predicted that Solana would rally to a record price of $1,000 in the long term. However, another crypto expert, known as CryptoPoseidonn, suggests that Solana may experience further sell-offs in the coming days, with a potential drop to around $150 before rising to $500.

At present, Solana is trading at $163, with losses of over 3% in the last 24 hours. On the weekly chart, SOL is down over 8%. Investors should also keep an eye on the immediate support and resistance levels for SOL, which are at $160 and $165, respectively.

Disclaimer: The information provided should not be considered as investment advice. Investing in cryptocurrencies carries risk, and capital is at risk.