Solana has gained nearly 3% in the past 24 hours while the broader cryptocurrency market rose just 0.5%, extending a three-month rally that has pushed the token up 37% and prompted technical analysts to suggest the digital asset could challenge its previous all-time high near $293.
What to Know:
- A hidden bullish divergence pattern on Solana's daily chart mirrors a setup that preceded a 63.63% rally earlier this year between April and June.
- The short-term holder Net Unrealized Profit/Loss metric stands at 0.11, indicating controlled profit-taking rather than the overheated conditions that typically signal local price peaks.
- Solana trades near $226 with immediate resistance at $251, and technical projections suggest potential targets of $312 and $349 if current patterns hold.
Technical Indicators Point to Potential Rally
A hidden bullish divergence has emerged on Solana's daily price chart, a pattern that occurs when the asset's price forms a higher low while the Relative Strength Index forms a lower low. Traders monitor the RSI to gauge momentum and determine whether a trend might continue or reverse.
The pattern suggests the current uptrend has underlying strength.
Between April 7 and June 22, Solana displayed this same technical structure and subsequently climbed 63.63% within a month. Another divergence formed between August 2 and September 25, with approximately 24% of that projected move already completed.
If Solana follows a trajectory similar to the April-June period, the price could reach $312 by late October. The timing and scale would roughly mirror the earlier rally, though technical patterns don't guarantee future performance.
On-Chain Metrics Support Bullish Case
Data tracking blockchain activity reinforces the technical outlook. The short-term holder Net Unrealized Profit/Loss metric, which measures whether recent buyers hold profits or losses, currently sits at 0.11. This level typically indicates measured profit-taking rather than excessive speculation.
During previous market cycles, NUPL values around 0.20 to 0.21 marked local price peaks in July and September, when short-term holders began selling more aggressively. The current reading near 0.10 to 0.11 resembles the levels seen in August, when Solana rose after minor price dips.
The metric suggests the market hasn't reached a major top.
Analysts view this as confirmation that the divergence-based price projections remain viable, with room for further gains before reaching overheated conditions.
Solana trades near $226 at press time. The immediate resistance level sits at $251, which aligns with the 0.618 Fibonacci extension, a technical marker traders often watch during sustained uptrends. A decisive close above this level could push the token toward $288.
Understanding the Technical Framework
The Relative Strength Index measures momentum by comparing recent gains to recent losses on a scale from 0 to 100. Readings above 70 typically suggest overbought conditions, while those below 30 indicate oversold territory. The indicator helps traders identify potential trend reversals or continuations.
A hidden bullish divergence occurs when price action and momentum indicators move in opposite directions during an uptrend. Unlike regular divergences that often signal reversals, hidden divergences suggest the prevailing trend has momentum to continue.
The Net Unrealized Profit/Loss metric calculates the difference between the current price and the price at which coins last moved on the blockchain. A positive reading indicates holders have unrealized gains, while a negative reading shows unrealized losses. The metric helps identify market sentiment and potential selling pressure.
Fibonacci extensions project potential price targets beyond the initial trend move. The 0.618 extension level represents a mathematically derived ratio that traders use to estimate where prices might encounter resistance or support during trending markets.
Price Targets and Risk Levels
If Solana breaks above $251 and maintains momentum, technical projections suggest a test of $288, followed by the $293 all-time high. This level represents a significant psychological barrier for traders who watched the previous peak.
A breach of the all-time high would open the door to the fractal-based targets of $312 and $349. These levels represent potential milestones based on the historical pattern analysis, though market conditions could shift before prices reach those zones.
The bullish scenario faces risks.
A decline below $213 would weaken the continuation thesis and suggest a possible short-term pullback. A drop below $190 would signal a deeper correction and invalidate the current technical setup.
Market participants will watch whether Solana can maintain its outperformance relative to the broader cryptocurrency market. The three-month rally has shown consistent strength, but the path to new highs depends on sustaining momentum through key resistance levels.
Closing Thoughts
Solana's technical and on-chain indicators suggest the potential for further gains, with historical patterns pointing toward possible tests of $312 and beyond. The current setup lacks the overheated conditions that typically precede price reversals, though traders should monitor key support levels at $213 and $190 that could invalidate the bullish outlook.
