Solana (SOL) has maintained its position above the critical $100 support level, drawing significant attention from investors. Technical analyst Ali Martinez suggests that SOL could surge as high as $4,000, citing a bullish cup-and-handle formation that signals potential upside momentum.
Solana Technical Outlook: Is $4,000 Achievable?
Martinez highlights that since November 2021, Solana has followed a U-shaped decline, followed by a consolidation phase. The formation of the cup-and-handle pattern indicates that breaking key resistance levels could lead to a massive price rally.
The $200 resistance level is seen as a crucial threshold. If Solana successfully breaks above this mark, Martinez believes a parabolic rise to $4,000 is possible. However, market conditions must remain favorable for this scenario to materialize.
Key Support Levels and Market Risks
Crypto analyst Ted Pillows emphasizes the importance of Solana maintaining support around the $110 level. If SOL falls below this support, a correction of 30-40% could follow.
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Conversely, strong buying pressure in the $110-$120 range could fuel renewed upward momentum. To sustain its long-term uptrend, Solana must hold these critical levels.
ETF Developments and Regulatory Influence
Solana’s price trajectory is not solely dictated by technical factors. The U.S. Securities and Exchange Commission (SEC) has delayed its decision on ETF applications for Solana, XRP, Litecoin (LTC), and Dogecoin (DOGE), pushing the ruling to May.
Bloomberg analyst James Seyffart noted that such delays are common, and the SEC has historically taken a cautious approach. If an ETF is eventually approved, it could drive greater adoption and attract long-term investors to Solana.
Solana Inflation Policy and Its Impact on Price
A proposal aimed at reducing Solana’s inflation rate by 80% (SIMD-228) recently failed to secure enough votes. Although 61.39% of participants voted in favor, the proposal required a 66.67% majority to pass.
Had it been approved, the reduction in circulating SOL supply could have positively impacted prices. However, maintaining the current inflation rate might incentivize validator participation, ensuring the security and stability of the Solana network.
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