Crypto Update: Is Solana starting to form a trend reversal pattern?

January 13, 2022
by Joseph Jeffriess, Market Analyst

Hi traders, today’s focus is on Solana, after this week’s impressive crypto fightback. Buying has been solid across the boards since Tuesday after risk markets made a comeback.

Solana put in a failed low on Monday that lined up with 130.35 support. The buying thereafter continues to confirm this level for now. Since the hold and rally, we have also seen the fast trend broken but for now, the main downtrend remains. Price, for now, sits around 152.10 resistance abut this level looks minor and could only offer a small pause if firm buyer momentum can continue. A bit more chunky resistance looks to be seen at 169.80 to 177.90 and this rea fit into the next key pattern we’re currently watching develop.

If we look at the chart below we can see the starting point of what potentially could become a major reversal pattern but for now, it’s a fair way off. The pattern we can see starting to develop is an inverse head and shoulders pattern. These patterns are the opposite of their bearish counterpart and can suggest that a trend reversal is in the making. Of course, confirmation is required.

We can see one shoulder has formed and the head has also started to form. What we want to see from here is a rally and a decline that forms the last shoulder. If we see a break of shoulders high this can be confirmed that a new trend is underway.

Firstly, we need to see Solana form the missing shoulder and, if that happens, it will be exciting to see if do get a confirmed pattern that could break the main trend and set up a new trend higher.

Solana D1 Chart

All times are AEDT.