The Solana (SOL) price broke out from a short-term channel and could soon attempt a break-out above the main resistance area.
Negative Solana news hit on Thursday when it was reported that the Solana merchandise stores would shut down. They had hosted over 75,000 people. Besides merchandise, the stores offered tutorials on play-to-earn and non-fungible token (NFT) marketplaces. Now, the Solana onboarding efforts will pivot into digital products like DRiP.
However, some better Solana news hit later the same day when Helium Network announced it would migrate to the Solana network on March 28.
Solana (SOL) Breaks out Above Crucial Resistance
The Solana price had fallen below a descending resistance line since May 15. The downward movement led to a low of $8 on Dec. 29. However, the price began an upward movement shortly afterward.
After four unsuccessful attempts, the SOL token price broke out from the descending resistance line on Feb. 18 2023. While it did not move above the $28 resistance area, it validated the resistance line as support (green icon).
The daily RSI reading is bullish. While the indicator previously generated bearish divergence (green line), it broke out from its trend line last week. Now, the RSI is above 50.
Therefore, the most likely price action for the future is a breakout above $26.80. If this occurs, the SOL price could increase to the next resistance at $38.
However, if the price breaks down below the resistance line, it could fall toward the closest Fib support area at $17.50.
Short-Term Breakout Confirms Upward Movement
The price history from the six-hour chart confirms the bullish sentiment from the daily one. After deviating below (red circle) the $20.60 horizontal support area, the SOL price broke out from a descending parallel channel. Such deviations often precede upward movements, as was the case in SOL.
Therefore, the trend is considered bullish as long as the Solana price is above $20.60. A breakout from the $26.80 area is expected.
However, a close below $20.60 would invalidate this bullish forecast since it would also cause the price to drop below the descending resistance line. In that case, a drop to $17.50 could follow.
To conclude, the most likely Solana price outlook is a breakout above $26.80 and an increase to $38. However, a close below $20.60 would invalidate this bullish forecast. In that case, the SOL price could fall to $17.50.
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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.