Solana is showing early signs of a potential recovery after forming a classic “W” pattern on the 12-hour chart.
This bullish structure has emerged following the November selloff, and if a breakout is confirmed, SOL could make a decisive move higher.
Solana holder provides support
Changes in HODLer’s net position indicate that long-term holders are starting to refrain from selling. Outflows are receding, indicating a reduction in distribution and a shift towards neutrality. This is encouraging for Solana, as LTH plays a major role in stabilizing price trends. Their containment gives room for the recovery to gain momentum.
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Improving sentiment among LTHs suggests that confidence may return soon. As selling pressure from these influential holders subsides, the likelihood of capital inflows increases. Historically, this transition from large outflows to more balanced movements has preceded strong medium-term price rebounds in SOL.
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Due to deteriorating market conditions, Solana’s NUPL indicator has recently slipped into the surrender zone. This zone represents the lowest psychological point for investors, where fear typically peaks and selling dries up. Capacity often signals the early stages of a trend reversal and provides fertile ground for accumulation.
SOL has been through this phase before. In April, NUPL also capitulated before a massive rally took the token to new highs. This indicator suggests another round of selling, and Solana could see a similar comeback if market sentiment remains stable.
SOL price breakout first
Solana is currently forming a double bottom “W” pattern, a bullish structure that suggests a 14% breakout potential towards $165. If a breakout from this formation is confirmed, the reversal will be verified and SOL will return to its upward trajectory.
SOL, trading at $143 at the time of writing, is nearing its neckline at $146. If this resistance can be overcome, driven by improving sentiment and positive on-chain trends, the token could be pushed towards $157. Overcoming this barrier will pave the way to $163 and ultimately the goal of $165.
However, if the breakout fails or the market becomes weak again, the pattern can break. If this happens, Solana could return to the $136 support level. Losing this support would invalidate the bullish outlook and slow recovery efforts.
