Traders should take these aspects into account when it comes to Solana’s price path.

Since her staggering rally in September, Solana has been unable to offer new heights to add to her burgeoning repertoire. In fact, its value has steadily declined on the chart and is currently trading at a 23% discount from its ATH.

While a bullish start to October looked promising, SOL was unable to break past the 61.8% Fibonacci level to extend its gains to a new ATH. Now the bulls have had the opportunity to reverse this scenario.

SOL was working on a breakthrough in the upstream channel but had to negotiate beyond delicate resistance to realize its full potential. At the time of this writing, SOL was trading at $ 161.4, up 1.1% in the past 24 hours.

SOL graph in 4 hours

As SOL was trading above the 9 (blue) EMA, the near-term momentum helped buyers. A reversal at the midline of the pattern would see SOL formulate a fourth attack at the upper trendline. Now, the confluence of this upper trendline and the 50% Fibonacci level at $ 166.1 could keep SOL anchored in the pattern.

However, if the bulls can break through this delicate barrier with healthy volumes to support its move, SOL could see an instant 7.5% to 8% increase in price. Sellers could then respond to a potential double top formation at the 61.8% Fibonacci level.

A break in the pattern would require a sustained bearish effort. The visible range POC near the 38.2% Fibonacci level has formed strong support which would seek to prevent prolonged declines in the market.

Reasoning

Based on the bullish cross of the Directional Movement Index and constant highs along the MACD, the bulls presented a valid case for a breakout to the upside. However, the RSI was close to the upper zone. A slight rise in the Fibonacci level of 50% coupled with an overbought reading of the RSI could invite profit taking in the future.

Conclusion

It was uncertain whether SOL would deviate north of its upstream channel, especially given the low 24-hour trading volumes. Since the RSI was also close to the overbought levels, expect SOL to reverse at the 50% Fibonacci level and form a new low at the lower trendline.