Solana (SOL) price has begun to consolidate in a tightening range and if the wider market remains stable, it’s possible that SOL could break out in the short-term.
SOL’s upside potential in the short term could be significant with the move, itself, occurring quickly. The 2022 Volume Profile between $53 and $90 is extremely thin, indicating that any daily close above $53 would easily move towards the next high volume node in the $90 value area.
In addition, the 50% Fibonacci retracement of the all-time high to the July 26, 2021 weekly low and the 2022 Volume Point of Control also exist in the $90 price zone.
SOL/USDT Daily Chart (Binance) Source: TradingView
Bulls traders should anticipate some resistance for SOL price near the Kijun-Sen and 61.8% Fibonacci retracement near the $70 price range. However, given how thin the Volume Profile is, that resistance may be short-lived.
Historicals suggest sells may struggle to pin SOL under $50
Downside pressure remains a concern but is likely limited in size and scope. The triangle pattern on the daily chart shows bulls have made another attempt to push SOL up and out, but have so far been rejected from spending any meaningful time above the upper trendline.
SOL/USDT Daily Ichimoku Kinko Hyo Chart (Binance) Source: TradingView
If a bearish breakout below the triangle does occur, bulls will understandably panic, but bears shouldn’t be overly confident. Despite the 2022 Volume Profile being thin below the $39 price level, the 2021 indicator also shows considerable participation between $41 and $48.
Another fast sell-off toward $39 is likely to occur if SOL closes the daily candlestick at or below $49.
Time cycles indicate a change in trend may begin soon
Solana price action is poised for a substantial bullish bounce from a time cycle perspective. In Gann Analysis, one of the most powerful time cycles is the 180-day cycle (extending to 198 days). Gann indicated that any instrument trending in a single direction over 180 days has a high probability of generating a powerful…