Solana is trading above a critical demand level around $157 and is showing signs of a possible recovery after a recent decline. This critical level has held despite market volatility and now all eyes are on Solana as it attempts to regain bullish momentum.

With the US election looming and the Federal Reserve's upcoming interest rate decision, this week promises increased volatility in the crypto market.

Top analyst and investor Carl Runefelt has published a technical analysis suggesting that Solana will need to break through a key resistance level in the coming days to regain a strong uptrend. Runefelt notes that this resistance has kept price in check and a breakout is likely to lead to renewed optimism among SOL investors.

However, the risk of further downside remains if Solana fails to secure a position above this critical resistance. As these significant macroeconomic events unfold, Solana's next moves will be closely watched as a break through resistance could signal a larger recovery in the near term.

Solana trading within a bullish pattern

Solana has been a standout performer this cycle, showing resilience as it remained above a crucial support level that previously acted as resistance. This pivotal moment could determine Solana's near-term trajectory as the company struggles to regain bullish momentum.

According to top analyst Carl Runefelt, insights on Runefelt's technical analysis focused on the 2-hour SOL chart highlights this resistance around the $164 level.

He believes that a confirmed breakout above this level would likely push Solana higher, signaling a return to bullish price action.

However, there is the potential for sharp price swings this week as the US elections and the Federal Reserve's interest rate decision create an environment ripe for uncertainty and market manipulation. These macro events have the potential to significantly impact Solana’s movement and make the resistance break even more critical.

If Solana breaks through this resistance and reaches support above $164, it could generate bullish sentiment and push the altcoin towards new local highs. However, failure to do so could result in increased selling pressure and the risk of a decline, especially if overall market volatility increases. Therefore, the coming days will be crucial for Solana's path forward as traders and investors closely monitor this key level.

SOL price action: Key levels to watch

Solana (SOL) is trading at $161 after recently recovering from local lows of $155. This move created a strong support base around $155, which has proven crucial in staving off further downside.

For the bullish momentum to prevail, SOL must now clear the $165 resistance level, which would confirm the potential for an upward price movement. A sustained rise above $165 could signal strength, encourage buyers and pave the way for further gains.

However, a retracement is likely if SOL fails to break through this critical level. In this scenario, the price could fall back to the subsequent demand zone around $150, which is closely aligned with the 200-day moving average (MA). The 200-day MA is a widely watched indicator and often acts as a strong support level in technical analysis, reinforcing the $150 zone as a potential floor.

This period of consolidation puts SOL in a crucial position, with price direction largely dependent on its ability to overcome the $165 level. As traders watch closely, this technical setup suggests that SOL's next move is likely to determine its short-term trend, with $150 seen as a key fallback level if the uptrend fails to materialize.

Featured image by Dall-E, chart by TradingView