Solana (SOL) has formed a classic cup and handle pattern which has a massive target of $3,800 according to analyst Ali Martinez.
Solana SOL $131.8 24h volatility: 1.1% Market cap: $68.03 B Vol. 24h: $4.24 B has recently caught the attention of crypto market participants following the formation of a textbook cup-and-handle pattern, a bullish technical structure that suggests an incoming bullish move.
According to crypto analyst Ali Martinez, if this pattern completes successfully, SOL could be on track to reach an overwhelming target of $3,800.
SOL Cup and Handle Formation
The cup-and-handle formation, as seen in the chart below, is a long-term reversal pattern that typically leads to explosive breakouts when confirmed. The cup represents a rounded consolidation phase, showing that selling pressure has diminished over time.
The handle, a smaller downward consolidation, shakes out weak hands before the breakout. By measuring the depth of the cup and extrapolating it from the breakout point, analysts derive the ambitious $3,800 target.
However, such a move depends on various factors, including the approval of spot Solana ETFs and institutional adoption of SOL.
Solana (SOL) Price Analysis
According to CoinMarketCap, Solana is trading at $125.25, gaining a mere 1% in the last 24 hours. However, short-term indicators suggest that SOL remains in a corrective phase.
The 20-day Exponential Moving Average (EMA) stands at $141.82 and is a key resistance level for the SOL token.
Also, the Bollinger Bands (BB) show that SOL is approaching the lower band ($111.48), which is the nearest support level for the sixth-largest digital asset.
On the other hand, the Relative Strength Index (RSI) sits at 37.20, just above the oversold threshold of 30. If SOL maintains current levels or sees a slight dip, a bounce could occur as buyers could step in at these relatively low prices.
A retest of the 20-day EMA at $141.82 would be an early confirmation of a reversal, while breaking past $168.20 (upper Bollinger Band) could indicate a continuation of the uptrend.
Rejection of SIMD-0228
The failure of Solana’s Proposal SIMD-0228 has added an extra layer of uncertainty to SOL’s trajectory.
The proposal, presented by Multicoin Capital, sought to adjust Solana’s inflation model from a fixed pattern to a floating one while also modifying the inflation rate based on the staking rate.
However, the proposal fell short, receiving only 43.6% approval instead of the required two-thirds majority.
With the inflation model remaining unchanged, Solana continues to issue staking rewards at a fixed rate, which some critics argue contributes to unnecessary sell pressure. According to Coin Metrics, Solana’s inflation rate is currently 4%, down from an initial 8%, but still above the long-term target of 1.5%.
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