The price of Solana (SUN) may surge more than 45% in the coming weeks as the cryptocurrency intends to complete a double bottom chart pattern against the US Dollar.
A SOL of $150 ahead?
Double bottoms usually appear at the end of a downtrend when the price falls to a low, bounces back and returns to the level near the previous low. With the bears unable to push the price to a new low, the selling sentiment dries up, leading to a sharp pullback to the upside and a subsequent breakout move.
sun has been something painting a similar pattern since Jan 24, especially after extending its rebound move by rising 25% year to date (WTD) to reach over $100.
Furthermore, a visible bullish divergence between Solana token price and Relative Strength Index (RSI) trends indicates a high probability of a double bottom breakout.
Nonetheless, a bullish confirmation could come if SOL price breaks above the double bottom neckline near $120 with an increase in trading volume. As it happens, the Solana token's bullish target could have a length equal to the maximum distance between the lowest point of the double bottom pattern and its neckline.
That would put SOL on track to at least $150, with the possibility of continuing the move higher towards $170, marked in red on the chart above.
Bull Trap Risks
As the double bottom imagined SOL at $150 or higher, popular market analyst "Capo" warned of a potential bull trap in the Solana market, noting that altcoins, in general, would resume their bearish trends.
The pseudonymous analyst presented $120, the neckline of the double bottom, as a solid resistance level that would likely cap Continued bullish pullback from SOL. He also applied the popular Elliott Wave theory to hint at the start of the next Solana bearish wave cycle, as labeled "c" on the chart below.
"It's impossible for me to be bullish here, after the breakout of all bullish correctives MS+ is moving higher", Capo said on March 1, adding:
"You can enjoy LTF bombs while they last, but don't get too comfortable."
Bearish outlook aligned with CoinShares report released last week showed that most altcoin-based investment vehicles witnessed negative investor sentiment, including Binance Coin (bnb), Moles (POINT), Cardan (THERE ARE), ripple (XRP), and Litecoin (LTC).
Related: Crypto Investment Funds Attract $36M in Capital Despite Market Turmoil
Solana also suffered as the week ending February 25 SOL investment products lost $2.6 million in capital outflows.
In contrast, all digital asset investment products combined attracted $36 million in the same period, with multi-asset portfolios injecting the highest capital: $14 million, followed by Bitcoin's 17.3 million.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
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