Considering a Buy on Solana? Wait for Prices to Re-Test the Support
Solana has attracted big market players with its ability to process many transactions at a low cost. This has set the currency on a bullish trend over the past few months. The cryptocurrency rose from a low of 43 on August 14 to an all-time high of above 215 on September 9.
Nonetheless, another twist came, which became a concern for Solana investors. A network outage on September 14 has since resulted in the crypto token failing to sustain its bullish run. The outage meant that Solana could not confirm any transactions on the network.
According to Crypto Briefing, Solana has liquidated up to $250 million since it began a bearish run after hitting a new record. The network outage has played a role in the liquidations, as investors also grew cautious.
But all is not lost, as SOL/USD is now showing bullish signs. Remember, the September 14 network outage on Solana was reported to have been caused by a huge increase in the transaction load.
A Twitter post confirmed that the transaction load peaked at 400,000 TPS, leading to the outage. It means that buyer interest is still strong in Solana, and we could see it potentially claiming recent highs or setting new ones.
The 4-hour and daily charts below are already showing the development of some bullish momentum.
– A Technical Outlook on the 4-Hour Chart
Looking at the 4-hour chart above, we can see a clear breakout on SOL/USD. The crypto token is trading above the descending trendline and descending triangle at the support of 136. Currently, SOL/USD is retreating to the support after violating the descending triangle, which could open a buying opportunity.
A look at the daily chart supports a potential bullish reversal on SOL/USD.
– A Technical Outlook on the Daily Chart
On the daily chart, SOL/USD has a bullish pin bar towering from the support at 136. The pin bar, which formed on Friday, pushed prices up, helping SOL/USD to break past the descending trendline. Clearly, the 136 level is turning into an important support for SOL/USD, and buyers could look to jump in from the mentioned price action confluence.
Will SOL/USD Bounce off the 136 Support Again?
In the next few days, price action trading will tell whether SOL/USD will hold onto the critical support at 136. Although I recommend a buy trade based on the current price action trading signals, I would wait a little bit and watch price behavior from the current retracement.
Currently, SOL/USD is trading at the 145 level, slightly above the 136 support. This means that SOL/USD will potentially test the support from the current retracement before surging higher. However, this is only speculative, and prices could jump from the current level. Thus, I would keep an eye on the price behavior of SOL/USD to find an appropriate buy-entry-level, as long as it remains above the 136 support. I would then target the levels around 170, 180 and 195, as my immediate or near-term take profits. Good luck!
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