Solana (SOL) on the Verge of a Huge Move?

TL;DR

• Solana’s Bollinger Bands have tightened on the 4-hour chart, a technical signal that sometimes precedes enhanced turbulence.
• Despite a mild retreat in the last few days, analysts remain bullish on SOL, with price targets ranging from $240 to over $300.

Silence Before the Roar?

Solana’s SOL has been on a slight downtrend in the past week, with its valuation slipping by 3% and currently trading at roughly $148 (per CoinGecko’s data). Over the last several hours, it experienced little to no volatility, ranging from $145 to $149.

One important metric, though, suggests this calmness could be a precursor of a massive price action in the short term. The indicator in question is the Bollinger Bands, which, according to the popular X user Ali Martinez, has squeezed on SOL’s four-hour chart. 

Developed by John Bollinger in the 1980s, this technical tool helps traders identify when an asset may be overbought or oversold, signaling a potential trend reversal. When the bands tighten, it typically indicates a period of low volatility, which could be imminently followed by a substantial resurgence or a considerable pullback.

This pattern has also appeared on the charts of other cryptocurrencies and, on some occasions, has been followed by a notable bull run. For example, in December last year, XRP’s Bollinger Bands tightened significantly when the price hovered around $2.10. Just a few weeks later, the asset soared to nearly a new all-time high of approximately $3.40.

We have to make a disclaimer that the squeezing bands might have played their role, but the entire cryptocurrency market was also rallying at that time. Bitcoin (BTC), for instance, reached an ATH of just south of $110K. 

Price Targets

Despite the setback on a weekly scale, SOL is up almost 20% for the month, and some analysts believe the uptick is about to continue.

Jelle told his over 100,000 followers on X that Solana’s monthly candle “is not looking too shabby,” indicating it might be time for another test of $240. The last time the price was trading so high was at the end of January this year.

Earlier this month, BitBull also chipped in. They assumed that SOL could be gearing up for a “massive move” this year, which might mimic Ethereum’s explosive performance in 2021. The analyst thinks the $120-$130 was an accumulation zone, setting a target of over $300.

Recall that Ethereum (ETH) traded at around $730 at the start of 2021, whereas by the end of the year, it hit an ATH of almost $5,000, representing a 560% price increase.