The Solana price continues to run higher, gaining +13% to $41.600. But the appearance of a bearish ‘hammer’ candle could signal a short-term reversal.
SOL has got off to a great start in June, capping a remarkable comeback from the steep losses it took in May’s rout.
Weekly Performance: +46.40%
Weekly Range: $27.0964 – $43.6147
Trading volume has been lower this week than last. However, trading activity has increased in the last 3 days. SOL/USDT 24-hour Volume on Binance is $666 million, only slightly below Cardano’s $667 million.
The longer-term outlook for the Solana price looks very positive. We can see that SOL has been trading in a strong uptrend since the 29th of May, low at $25.7566.
The most recent test of this trend came yesterday when the price dipped to $34.1989. After an inch-perfect tag of the support, SOL exploded higher by 29% to today’s high of $43.3244.
However, the 4-hour chart shows after setting today’s high, the Solana price reversed lower, finishing the period at the low end of the range. This has formed what’s known as a hammer candle.
A hammer candle can often suggest an upcoming change in trend. The bearish signal has just been triggered as the last fully-formed candle made a new high but closed at almost the same price it opened. This can be seen by the long wick and small body of the candle.
The recent low of $19.0100 was marked by a bullish hammer candle on the 23rd of May. This signaled a trend reversal and the start of a 125% rally.
Overall, as long as the broader cryptocurrency market remains stable, I think Solana will continue to higher. Nonetheless, the recent development indicates there may be a better entry price for bulls.
A pullback towards the trend line support at $36.00 would offer a better value for money entry. Buyers could then place a tight stop just below the support for a low-risk, high-reward trade.
Of course, if the price makes a new daily high it would cancel the short-term bearish outlook.
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