The price of Solana (SOL) has formed a rising wedge pattern on the 4-hour chart. This suggests that the altcoin may undergo a correction before its value rises to $260. Currently, the value of SOL is $237.88, up 15% over the past 7 days.
Solana holders will expect the rally to continue. However, several technical indicators suggest they may have to wait a little longer.
Solana shows a rising wedge pattern, retreating from the uptrend
On the 4-hour chart, BeInCrypto observed that a rising wedge pattern has emerged in Solana. The rising wedge is generally considered a bearish technical pattern, suggesting the possibility of a reversal in the uptrend.
Two converging trendlines define the pattern. Here, the lower trendline (support) rises more steeply than the upper trendline (resistance), forming a narrowing channel. If the price falls below the lower trendline, a bearish reversal is confirmed, indicating a potential downtrend.
However, in some cases, an upside breakout can occur, but this is rare. In the case of SOL, the price may have a higher chance of falling below the lower trendline. If confirmed, the altcoin's rally could be interrupted, and a significant decline may follow.
Furthermore, the Money Flow Index (MFI) adds weight to this bearish outlook. MFI is a technical indicator that uses price and volume to measure the capital flowing in and out of a cryptocurrency.
A rising MFI indicates strong buying pressure, while a decline emphasizes the dominance of sellers. Currently, the MFI is showing a downward trend, reinforcing the bearish sentiment. The confluence of this signal with the rising wedge pattern strengthens the possibility of a Solana price decline.
SOL Price Prediction: $205 or $260
On the daily chart, Solana's price faced resistance at $239.56, which occurred during an attempt to rise to $260. This may make it difficult for SOL to reach a new all-time high in the short term.
The Fibonacci retracement indicator also supports this prediction. The Fibonacci indicator shows a gradually increasing sequence of numbers that converge on the potential price levels the cryptocurrency can reach.
Notably, the 23.6% Fibonacci level represents a potential retracement point. Considering the Solana rising wedge and the lack of buying pressure, the altcoin's price could decline to $205.12.
However, if SOL breaks above the upper trendline of the rising wedge, this may not occur. Instead, the token could exceed $260 and set a new all-time high.
