Solana (SOL) Sets Up for Potential Bullish Reversal, Says Analyst

A closely followed pseudonymous trader, Inmortal, has recently flagged a significant event in the Solana (SOL) market

A closely followed crypto trader says that a "massive" bear trap just got set in the Solana (SOL) market and it could be a sign of a potential bullish reversal.

In a recent tweet, Ben Gesell, who is known in the industry as Inmortal and is recognized for his technical analysis skills, shared his thoughts on the recent price action of Solana.

According to Inmortal, who boasts a substantial following of 231,500 on X, formerly Twitter, he believes that Solana just pulled off one of the biggest bear traps he’s ever seen earlier this month.

What Is A Bear Trap?

A bear trap occurs when the market signals that an asset’s price will decrease, leading traders to open short positions in anticipation of the anticipated price drop. However, instead of the price continuing to trend down, it quickly reverses direction and moves up, catching those who bet on the downtrend off guard.

According to the crypto analyst, Inmortal, he thinks that the recent price action of Solana has created one of the most significant bear traps he’s encountered.

Earlier this month, Solana's price briefly dipped below the $100 mark. Many market participants believed that this signaled the beginning of a further downward spiral for the asset. However, the drop was short-lived, and instead of continuing its downward trajectory, SOL rapidly reversed and started moving upwards.

This quick rebound has many traders speculating that the asset might be poised for a substantial rally, and Inmortal is no exception.

The analyst stated that the weekly candle representing this price action is likely one of the biggest bear traps he’s seen, signaling a possible price surge for Solana.

His statement suggests that those who shorted Solana during the dip below $100 may soon find themselves on the wrong side of the trade, as the market could continue upward from here.

Solana's price is currently trading at around $118, showing a 17% increase over the past seven days, according to data from Benzinga Pro. As Solana trades above the $120 resistance, it will be interesting to see if it can sustain this momentum and potentially reach its previous all-time highs.

Key Technical Indicators

Following this bear trap, Solana's price action appears to show signs of a bullish reversal. Key technical indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) will be crucial in determining whether the rally is sustainable.

In addition, the sudden price recovery has sparked renewed interest from both retail and institutional investors. Market sentiment around Solana has shifted positively, with many traders now viewing the dip as a potential buying opportunity. The influx of buying pressure could accelerate the asset's price upward, causing further short-squeeze action in the market.

What's Next For Solana

While it’s still early to confirm the full extent of the bullish reversal, the short-term prospects for Solana look promising. Traders will be watching for confirmation of the bullish trend with key technical indicators. If the market continues to show strength, Solana could break past the $120 resistance level and set its sights on higher price targets.

As always, with the inherent volatility in the crypto market, caution is advised. While the potential for a rally is high, the possibility of another price retracement remains present, so traders should be prepared for further price fluctuations.