Solana’s (SOL) price has surged by 19% in the past week. Over the past seven days, it has seen the most gains among the top five largest cryptocurrencies by market capitalization.
Its price movements assessed on a daily chart reveal the formation of a bullish pennant pattern. This hints at the possibility of a further rise in the altcoin’s value.
Solana Has More Up Its Sleeves
A bullish pennant pattern is formed when a strong upward price movement (flagpole) is followed by a period of consolidation that resembles a small symmetrical triangle (the pennant). This pattern suggests that buyers are temporarily pausing before potentially continuing the uptrend.
At press time, SOL trades at $160 and appears poised to breach the pennant’s upper trend line. Traders often look for a breakout above the pennant’s upper trend line as a signal to enter a long position.
Readings from some of SOL’s technical indicators confirmed that the breakout might happen. For example, its Awesome Oscillator has returned only green upward-facing histogram bars since July 15.
This indicator measures an asset’s price momentum. When it displays green bars, it signals increasing bullish momentum. This means the asset’s short-term small moving average (SMA) is rising faster than its long-term SMA, suggesting that buying pressure is increasing.
Further, SOL’s Chaikin Money Flow (CMF) is in an uptrend and currently rests above the zero line. This indicator measures the flow of money into and out of an asset. A CMF value above zero is a sign of market strength. It means that buying pressure is high and outpaces selling activity.
Read More: 6 Best Platforms To Buy Solana (SOL) in 2024
Traders interpret a positive CMF as a precursor to a sustained price rally, especially when it is spotted during periods of price rallies such as this.
SOL Price Prediction: The Road To $170
Solana’s rising futures open interest confirms the bullish bias towards the altcoin. At press time, the coin’s futures open interest is $2.19 billion, increasing by 18% in the past seven days.
An asset’s futures open interest refers to the total number of futures contracts that have not been settled. When it spikes, it means that more traders are entering into new positions.
If this trend persists, SOL will break above the upper line of the bullish pennant pattern. It will exchange hands at $164.51 and rally toward $170.
However, if market sentiment shifts from bullish to bearish, SOL’s value may drop to $154.22 and linger within the pattern for a while longer.
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