Solana (SOL) appears to be on the verge of a breakout as it maintains a support level of $157 and targets a potential rise to $185. Technical indicators suggest that bullish momentum is building for the altcoin.
SOL has formed a classic cup and handle pattern on its daily chart. The cup bottomed out around $131, while the handle is currently consolidating just beneath the neckline at $166. This pattern is typically indicative of a bullish signal, where a breakout above the neckline often leads to significant upward movement.
Currently trading at approximately $162.30, SOL is positioned just below a critical resistance level, representing a temporary pause before potentially moving higher. Maintaining its position above the trendline support will be crucial for SOL to reach the $185 target, especially if buying volume increases.
Additionally, Solana has witnessed significant outflows from exchanges, with $7.58 million leaving on July 13th alone. This trend indicates that investors are opting to hold their SOL long-term, as tokens taken off exchanges reduce the immediate selling pressure. Such outflows create a supply squeeze, which can lead to price increases if demand remains strong.
Another factor contributing to the positive sentiment around SOL is a notable spike in short liquidations on the same date—$555,000 compared to a mere $71,000 in long liquidations. This suggests that bearish traders found themselves unexpectedly on the losing side, driving prices upward as they rushed to cover their positions. This trend, particularly through trading platforms like Binance and Bybit, could catalyze further bullish momentum, especially if more short positions are liquidated.
Overall, the technical setup, coupled with the exchange dynamics and liquidation data, creates an optimistic outlook for Solana, suggesting the potential for continued growth in the near future.