Solana price has completed a rounding bottom pattern with a 96% target objective to $294.54.
Tailwinds from expected supply pressure in FTX auction stalls rally for SOL, alongside broader market indecision.
A weekly candlestick close below $130.45 would negate the bullish thesis.
Solana (SOL) price’s recent performance put the Layer-1 token and its chain on a pedestal. This coupled with the favorable transaction fees tilted the odds in favor of Solana amid an ongoing contention against Ethereum’s chain. The sentiment was reinforced by the flurry of meme coin projects that embraced Solana for the launchpads. These themes were the tailwinds for Solana price to recover.
Also Read: SOL rises 5% as transaction activity becomes long-standing highlight of Solana Network’s performance
Solana price has consolidated in a rounding bottom pattern, which not only marks the reversal of a downtrend but also indicates the start of an uptrend. However, this uptrend may be delayed amid expectations of supply pressure as defunct trading platform FTX is expected to auction the remainder of its SOL tokens.
It comes after a $1.9 billion SOL token liquidation by FTX, with the remainder of the tokens set for auction at a fixed price. Other details of the auction remain undisclosed, and FTX has not immediately responded to FXStreet request for comment.
Meanwhile, some like Figure CEO Mike Cagney have already confirmed participation. Saying he expects positive results like it happened during the sale of Galaxy Digital and Pantera Capital.
During the previous sale where FTX sold two thirds of its SOL tokens, it was able to yield almost $2.6 billion at approximately $60 per token. The move to auction the coins is bullish for FTX’s plaintiffs and creditors, considering that it opens the possibility of securing a sale price that aligns more closely with the current market value.
After completing the rounding bottom pattern, Solana price’s bullish breakout continues to stall. A rounding bottom pattern is a bullish reversal pattern that happens after a prolonged downtrend. The price action forms a “U” shape, indicating a change in long-term price movement or sentiment from bearish to bullish, where the price decline loses momentum, followed by a gradual recovery before a breakout to the upside.
If the $130.45 support holds, Solana price could bounce north into the supply zone that stretches from $200.00 to $259.90. A break and close above this zone would confirm the continuation of the primary trend.
In a highly bullish case, Solana price could flip the supply zone into a support or bullish breaker, confirmed by reclamation of the all-time high at $259.90, before establishing a higher high.
The Relative Strength Index (RSI) remains in bullish territory as it continues to hold well above the 50 mean level. Also, the 21 and 50-day Smooth Moving Averages (SMMA) indicators are also in an overall uptrend, showing this is the overall trend direction.
SOL/USDT 1-week chart
Conversely, if the RSI fails to produce a higher high, it would signal a shift in momentum. Investors looking to short SOL should wait for a candlestick close below the $130.45 support, or in a dire case a weekly candlestick close below the 50-day SMA at $98.36. The volume profile showing a cratering histogram also threatens the case for the upside.
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