Bitcoin’s rally to a new all-time high pushed the altcoin market higher ahead of the weekend. Solana, the most recent addition to the top-10 list, led the charge among altcoins, with a 17 percent increase in the last 24 hours. SOL dethroned XRP to become the sixth-largest cryptocurrency, with a market cap of $53.41 billion, thanks to strong 24-hour trading volumes.
On the chart, a bull pennant breakout provided the foundation for SOL’s massive rise. With such favorable market conditions, SOL could extend its gains to the 78.6 percent Fibonacci Retracement level before a correction occurs.
Based on the length of the flagpole, SOL aimed for a 22 percent run-up from the breakout point of its bullish pennant. As SOL rebounded from the 38.2 percent Fibonacci level, the formation of ‘three white soldiers’ – a bullish candlestick reversal pattern – indicated a significant change in market sentiment.
According to SOL’s projected target, there appeared to be some additional room for growth before a correctional wave hit the market. The $190 level, as well as the 78. percent Fibonacci level, would be attractive take-profit targets, and SOL could extend its leg to these levels in the coming sessions.
Once a retracement begins, SOL may seek to stabilize at the 61.8 percent Fibonacci level or at the $181-support level before the next upcycle begins.
In contrast, given the extremely bullish market conditions, an extended hike cannot be ruled out. SOL would target its previous ATH of $216 if it closes above the 78.6 percent Fibonacci level. This would imply an additional 15% increase from SOL’s press time level.
Surprisingly, at the time of writing, the Squeeze Momentum Indicator showed only four green bars. During a bull run, the SMI typically registers 12-15 rising green candles before the momentum begins to slow. If this is the case, SOL could see more gains in the near term.
Meanwhile, the MACD’s first bullish crossover in four days is expected to add to the market’s upward pressure. Having said that, the overbought nature of the RSI may be cause for concern.
Overbought RSI readings are likely to weigh on SOL’s trajectory, and the alt could see gains up to the 78.6 percent Fibonacci level before bears take control. However, if SOL can get one leg above $195, a retest at $216 becomes a possibility.