Solana Recovers with Broader Market Tailwinds: Will a Morning Star Pattern Help SOL Price Bounce Back Above $200?

With a new bullish spree in the crypto market, Solana has recovered 4.24% yesterday, creating a bullish engulfing candle and surpassing the $175 mark.

With newfound momentum, technical indicators are gradually becoming optimistic for Solana. The question remains: will this recovery exceed the $180 supply zone to reinstate the bullish trend?

Solana Nears $180 Zone: Potential Breakout Ahead?

The daily chart for SOL price reveals a significant drop from the $260 supply zone, nearly retesting the 23.6% Fibonacci level at $159.47. This marks a 35% correction, reflecting bearish pressure.

After lower price rejection from the 23.6% Fibonacci level, Solana has formed a Morning Star pattern, indicating a potential reversal. The bullish engulfing candle of this pattern was created yesterday with a 4.24% surge.

Currently, the SOL token trades at $175.70, struggling near the 38.20% Fibonacci level. Just above this level, the crucial volume zone at $180 acts as immediate resistance.

Technicals Reveal Upcoming Reversal Run

The short-term recovery appears to be a potential retest of the broken zone. However, this recovery indicates a possible comeback for Solana as the Chaikin Money Flow Index approaches the zero line.

With a significant recovery within the negative territory, the Chaikin Money Flow Index is close to turning positive. Furthermore, the technical indicators on the hourly timeframe are signaling bullish momentum.

These signals are based on moving averages and oscillators, yet the daily timeframe still suggests a selling opportunity.

Whale Accumulation Strengthens the Bullish Case

Amid this positive recovery, a crypto whale has shown strong confidence in Solana, purchasing 174,767 SOL tokens over the past four days.

These purchases are valued at $29.87 million from Binance. Additionally, the whale has staked 174,705 SOL tokens, reducing available supply and potentially bolstering Solana’s price.

Can SOL Breakout and Reclaim $200?

With increasing optimism, the short-term recovery hints at a potential breakout rally for Solana. Based on Fibonacci levels, a breakout above $180 would likely challenge the 61.80% Fibonacci level at $204.

This raises the possibility for SOL to surpass the $200 psychological mark. Beyond that, a V-shaped recovery could propel SOL towards the $260 supply zone, bringing bullish momentum back into play.

Conversely, Solana must stay above $159.47, which serves as crucial support. A failure to hold this level could lead to a dip towards the $150 psychological support, potentially extending the correction.