Solana's price gained significant momentum over the past week, rising 10% amid an improved sentiment across the cryptocurrency market.
This new optimism has boosted the coin, and as the bullish momentum strengthens, SOL appears to be preparing for a continued rally.
Solana, Market Momentum Shift
SOL's double-digit rally last week has caused it to trade within an ascending parallel channel on the daily chart.
Want more insights on this token? Subscribe to editor Harshi Notariya's daily crypto newsletter here.
This pattern forms when price movement creates higher highs and lows, moving between two ascending parallel trendlines. The lower boundary acts as dynamic support, while the upper boundary acts as resistance.
When an asset trades within such a channel, it indicates an upward trend where demand exceeds supply. The reading on SOL's Relative Strength Index (RSI) confirms the buy-side pressure supporting the current rally. At the time of writing, this momentum indicator is 57.63.
The RSI indicator measures an asset's overbought and oversold market conditions. It ranges from 0 to 100. Values above 70 indicate an overbought asset and expected price decline, while values below 30 suggest an oversold asset that may rebound.
SOL's RSI reading indicates that market participants prefer accumulation over distribution. If this trend continues, the price could continue to rise.
Additionally, SOL's Elder-Ray Index has remained positive over the past two trading days, marking a significant turning point after nine days of red histogram bars. This change indicates a positive shift in market momentum, with the current index at 11.71.
The Elder-Ray Index measures the balance of power between buyers and sellers. When the value is positive, buying pressure exceeds selling pressure, and buyers dominate the market.
In SOL's case, the Elder-Ray Index reinforces the bullish outlook, suggesting that the recent rally could be extended if buying interest persists.
SOL Bulls and Bears Facing Off Near $186
Currently, SOL is trading at $181.82, just below the resistance level of $186.52 at the upper boundary of the ascending parallel channel.
If buying pressure increases, the token could break through this barrier and surpass the psychologically important $190 level.
However, if selling pressure returns, SOL risks losing its recent gains and falling to $176.64.
