Solana’s MACD Rising – Could This Indicate an Upcoming Breakout?

Solana (SOL) appears to be regaining momentum, with technical indicators suggesting a possible breakout on the horizon. The weekly chart shows the MACD beginning to turn upwards, having recently crossed above the signal line, which often signals the potential for significant price movements. As momentum builds, traders are eagerly observing whether this shift indicates the start of a more extensive rally.

Growing Momentum Signals Potential Solana Breakout

Market analyst Willjayducks recently highlighted a crucial bearish divergence on Solana’s weekly chart. He noted that during the price surge towards its peak, both the RSI and MACD indicators exhibited signs of diminishing momentum. This divergence between the market price and momentum indicators is a well-recognized technical pattern typically seen before substantial corrections.

As a result of this divergence, Solana underwent a sharp downturn, losing around 67% of its value within a mere 84 days. According to Willjayducks, this significant decline suggests that the bearish divergence may have already played out, signaling that the correction might soon be coming to an end.

He further explained that the MACD is currently rising and has crossed above the signal line, which indicates that the recent downward pressure could be subsiding. This shift could pave the way for a potential recovery. His analysis suggests that if SOL can build sufficient strength and maintain its upward momentum, the MACD line might eventually surpass the zero line, marking a stronger bullish signal that generally confirms a trend reversal.

If this scenario unfolds, Willjayducks anticipates that Solana could aim for new highs, rekindling interest among traders and investors. However, he also issued a note of caution; he plans to closely observe the chart for any signs of bearish divergence after a bullish breakout, which could indicate a heated market once again.

Bearish Scenario Remains Possible

The analyst concluded that there is always a possibility that the momentum could fade and lead into a bear trend. Despite the recent upward signals and improvements in technical indicators, he expressed concern that the current momentum may not be sufficient to support a complete reversal.

Should the price action falter, the market could experience a prolonged downside phase. Willjayducks stressed the importance of closely monitoring price movements and preparing for various scenarios. Whether the market trends upward or weakens, he advised being alert and flexible in response.