The price of Solana (SOL) faced a key directional decision in recent days, and currently it looks like the bulls have the upper hand after a tough battle with the bears. However, the SOL price is not out of the woods yet. But a decision could come as early as today.
Solana Poised To Rally Above $25?
The crypto market is still heavily dependent on macro data from the US. And before the next FOMC meeting is due next week, the PCE, the Federal Reserve’s preferred inflation metric, will be released today at 8:30 am EST (2:30 pm CET). This makes today the most important day of the week
February’s personal consumption expenditures (PCE) price index was +0.3% on a monthly basis, below the forecast of +0.4%. For March, analysts expect an unchanged increase of +0.3%. On an annual basis (YoY), an increase of 4.5% is expected, up from 4.6% in the previous month. If core inflation rates fall, a bullish reaction is expected in the crypto market, and Solana is perfectly positioned to deliver a massive upside bounce.
As we discussed in our analysis two days ago, SOL faced an extremely important trend decision on the 1-day chart over the past days. Already since the end of December 2022, Solana has formed an uptrend. However, the ascending trend line (black) was tested by the bears several times in the last few days.
Currently, the SOL price is clearly above the trendline again. Thus, if the PCE in the US is favorable today, Solana could start a run towards the 200-day Exponential Moving Average (EMA) (blue).
Since Solana fell below the “bull line” on April 8, 2022, it is still technically in bear territory. In mid-April 2023, the first attempts failed. While Bitcoin and numerous altcoins are already trading above the 200-day EMA, SOL is still stuck below the trend indicator as a result of the FTX crash.
Holding the trendline could now be the impetus that catapults SOL price back towards the 200-day EMA and into bull territory. The border line is currently at $25.12.
However, to confirm a new attempt, Solana needs to rise above $22.78. If SOL manages to stabilize above this resistance level, the buy side could again target the 200-day EMA. If this succeeds, the yearly high at $27.13 comes into focus, where the 38.2% Fibonacci level is also located.
Remarkably, the current strength of Solana can also be seen in the SOL/BTC chart (1-hour). At press time, SOL was just about to break the downtrend in the lower time frame. A move towards 0.0008018 seems possible.
Featured image from Binance Academy, charts from TradingView.com