The start of the second quarter is bullish for the Solana (SOL) price as the levels surpass $125 after a tight consolidation. Although SOL-based tokens are gaining momentum, the value of the native token remains unaffected. Does this suggest the market participants have shifted their focus away from the token? Will the SOL price continue to remain consolidated below $130?
The SOL price is speculated to be under bearish influence, with a high risk of falling back to $100 in the coming days. The main reason behind the bearish narrative is the formation of a bearish flag in the daily chart. A breakdown from the pattern usually results in a massive pullback, but in the wider perspective, the bulls are trying hard to invalidate the pattern. The Solana price is displaying some hidden bullish divergence, which suggests a huge breakout is following after a tight consolidation for a while.
As seen in the above chart, the SOL price is stuck within a bearish pennant, but the bearish activity began much before the validation of the pattern. The Ichimoku cloud has already undergone a bearish crossover before the end of Q1 that compelled the price to begin the monthly trade on a bearish note. However, the Bollinger Bands are trading parallel to each other, suggesting a drop in volatility.
Meanwhile, the technicals remain indecisive as the RSI has displayed a bearish divergence while the CMF is trying to trigger a bullish divergence. This suggests the strength of the rally is weakening, but the bulls are gaining strength compared to the bears with a rise in the buying pressure. Therefore, the Solana (SOL) price is stuck within a determined range and displays a huge possibility of pullback. However, the bulls have been defending the support at $123 since March 2024, and hence, a rebound could be on the horizon.
However, if the rise in the volatility negatively impacts the crypto markets due to the announcement of new tariffs by US President Trump, a breakdown may drag the SOL price to $115 or $110. Only a major sell-off or a FUD may drag the levels below $100; until then, the probability of revising a rise to $150 remains imminent.
