Crypto exchange Kraken is saying that Ethereum competitor and smart contract platform Solana (SOL) could be jockeying for a strong rally by early 2022.
In a recent report, Kraken says that Solana has been trading within a large bullish pattern dating as far back as 2020.
According to the crypto exchange, Solana’s corrective move from its all-time high of around $260 puts the Ethereum challenger in a position to ignite the next leg of its bull cycle.
“The fourth-ranked crypto asset appears to be in the early innings of its fourth wave of ‘price discovery.’ Accordingly, it appears in the early innings of a fourth wave of price discovery, potentially continuing the trend along the wedge pattern.”
Kraken adds that Solana’s recent pullback can be viewed as a bullish signal as the backtesting of the diagonal support could mean that SOL may be gearing up for a rally.
“The bounce could be interpreted by many as not only just ‘bullish,’ but also a sign that a test of the wedge’s resistance could follow in the month(s) ahead.”
The report also explains why a long consolidation period is bullish for SOL.
“As with many other chart patterns, the longer it takes for SOL to trend higher while also retaining the wedge’s uptrending line as support, potentially the higher SOL could travel before ultimately cooling off and entering into a downtrend.”
Based on Kraken’s chart, an abrupt Solana resurgence could propel the large-cap crypto asset above $600 by January 2022, suggesting a potential upside of over 255% rally from its current price of $169.
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