Solana Traders Jubilant as SOL Soars 35% After Falling Wedge Escape, but There’s a Big Catch

Solana’s native token SOL has entered a period of consolidation following a massive 35% upside breakout, according to recent analysis.

SOL surged higher after breaking out of a falling wedge pattern on its daily chart. Analyst CryptoBusy highlighted the breakout, noting SOL was retesting former resistance around $32.94 as new support.

According to analysis from altFINS, SOL remains in a clear uptrend across short, medium and long timeframes after inflecting from its downtrend. However, the powerful rally has left SOL extremely overbought, with its RSI above 80.

Source: altFINS – Start using it today

This suggests the rally is overextended and SOL is due for a pullback or consolidation around current levels before attempting to push higher. Key support sits around $20 where former resistance flipped into support. Initial resistance is seen from $25 to $30.

Traders will be watching to see if SOL can establish support and build momentum for a renewed push towards the resistance. The falling wedge breakout remains bullish and suggests the rally could continue. But extremely overbought conditions indicate a cooldown is likely first.

SOL will need to hold support on any pullbacks and wait for overbought readings to reset before traders gain confidence in the next leg higher. While SOL remains in a clear uptrend, the risk of a deeper pullback increases following the parabolic 35% surge if key support levels fail to hold. Traders may look to enter on the next dip rather than chasing upside.

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Vignesh Karunanidhi
Vignesh Karunanidhi

Seasoned crypto writer with deep passion for blockchain and cryptocurrency