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A cryptocurrency analyst has pointed out how Solana may be moving toward a sky-high main target based on a cup-and-handle breakout.
Solana Is Breaking Out Of A Cup And Handle
In a new post on X, analyst Ali Martinez has shared a pattern that the 1-week price of SOL has appeared to have been following during the last few years. The pattern in question is a “cup and handle” from technical analysis (TA).
It’s made up of two parts: a U-shaped trendline forming the “cup” and a downward parallel channel representing the “handle.” As the asset moves through the pattern, it first goes through a decline to a low, then observes a rebound back to about the same height as before the drawdown. Finally, it once again witnesses a bearish trajectory, this time one consistent with a descending channel.
When the price is inside the channel, the usual rules of the formation apply: the upper line acts as a resistance barrier, while the lower one provides support. A break out of the levels can imply a continuation of trend in that direction.
A cup and handle is generally assumed to be a bullish continuation pattern, meaning that breakouts can be considered more probable to occur in the up direction.
The same seems to have held true for Solana as well, as its 1-week price has just seen a surge beyond the resistance line of its multi-year cup and handle pattern.
As displayed in the above graph, the weekly Solana price went down and up along a cup between 2021 and 2024, but this year, it entered into the handle or downward consolidation phase.
After some period of stay inside the zone, the coin finally found a break away from it in July. This escape from the descending channel occurred with an upward surge, a potential sign that sustained bullish momentum may be coming for SOL, if the pattern is anything to go by.
As for what could be a potential target for the cryptocurrency’s price, the analyst has suggested a rather bold one: $1,314.41. The target corresponds to a line from Fibonacci Extension levels.
Fibonacci Extension levels are drawn on an asset’s price chart starting from a bottom point. Martinez has taken SOL’s cup low as the zero level. Each successive level corresponds to some percentage extension from this bottom, equal to a ratio from the popular Fibonacci series.
The 1.414 Fibonacci Extension level lies at $1,314.41 for Solana right now. It now remains to be seen whether the coin will eventually surge to this mark, or if the breakout will fizzle out.
SOL Price
Solana has performed better than most top coins over the past week as its price has surged by more than 17%, reaching the $238 mark.
