- Solana’s (SOL) price chart is forming a cup-and-handle pattern, which could position SOL for a potential 2,000% rally
- The cup-and-handle pattern typically resolves when the price breaks above the neckline resistance ($205 for SOL), with a target as high as the maximum distance between the cup’s trough and the neckline, suggesting SOL could reach around $4,500
- The potential SOL price surge may be driven by an anticipated altcoin season following the upcoming Bitcoin halving event, as traders often shift focus to altcoins after Bitcoin halvings
Solana’s SOL token is painting a near-perfect cup-and-handle pattern that could result in a massive price increase. This technical analysis examines the chart setup and potential upside targets.
Cup-and-Handle Formation on Weekly Timeframe
The so-called “Ethereum killer” SOL has already risen by over 2,000% since establishing a cycle low of around $10 in November 2020. In doing so, its price has formed what appears to be a cup-and-handle pattern on the weekly chart, as identified by veteran analyst Peter Brandt.
A cup-and-handle pattern forms when the price makes a U-shaped recovery that looks like a cup, followed by a period of consolidation that resembles a handle. The handle often signals a moment of indecision as traders wait to see if the upward trend will continue. This seems to be the current market psychology for SOL, with its price consolidating inside the $100-200 range since March 2021.
Breakout Target Around $4,500
In technical analysis, a cup-and-handle pattern typically resolves when the price breaks above the pattern’s neckline resistance, around $205 in SOL’s case, and rises by as much as the maximum distance between the cup’s trough and neckline.
That puts SOL’s theoretical breakout target around $4,500, up by more than 2,000% from current levels. However, it’s important to consider the historical probabilities of cup-and-handle patterns actually reaching their targets. According to a study by analyst Thomas Bulkowski, only 61% of cup-and-handle setups hit their expected price objectives.
Bitcoin Halving Could Propel Altseason
More bullishness for Solana comes from hopes of an impending “altseason” after Bitcoin’s next halving event. Historically, altcoin markets have surged after previous halvings in 2016 and 2020. Once Bitcoin has rallied, attention often turns to higher-risk, higher-reward altcoins. An altcoin boom in 2021-2022 could provide tailwinds for SOL’s already-bullish chart setup.
In summary, Solana’s technicals and market cycles indicate substantial upside potential in the coming years. However, traders should remain aware of the risks, as chart patterns do not always achieve their expected targets.
