Key Takeaways
Solana’s Cup and handle formation signals breakout potential toward $185 and $220. Short liquidations and exchange outflows support a bullish continuation structure.
Solana [SOL] is currently retesting its breakout zone around $157 after breaking above an ascending trendline earlier this week.
The price action aligns with the 1.618 Fibonacci extension near $178, suggesting bulls are preparing for a potential rally.
At the time of writing, Solana traded around $162.30, just below a critical resistance level. This structure reflected a temporary cooldown before continuation.
Therefore, the price holding above the trendline support could provide momentum for a move toward the next target at $185, especially if buying volume returns in the coming sessions.
A bullish reversal ahead?
Solana has printed a textbook cup and handle pattern on the daily chart, with the cup bottoming near $131 and the handle consolidating just below the $166 neckline.
This bullish continuation setup signals growing investor confidence and often leads to major breakouts when neckline resistance breaks.
Historically, cup and handle patterns tend to resolve with sharp upside moves, especially when fueled by strong demand and supportive market conditions.
If bulls flip the $166 level into support, SOL could climb toward $185, with the $220 mark as the extended upside target from the formation.
Source: TradingView
Investor confidence in Solana
Solana continues to see steady spot outflows, with a $7.58 million net outflow on the 13th of July.
This consistent pattern indicates that investors are withdrawing SOL from exchanges, reducing the immediate supply available for selling.
Typically, exchange outflows reflect long-term holding behavior and suggest a bullish sentiment among holders.
This trend reinforces the broader accumulation phase and could support higher price levels if demand remains steady.
With fewer tokens circulating on trading platforms, the conditions favor continued upward price pressure.
Did short liquidations trigger Solana’s latest rally attempt?
Solana experienced a sharp spike in short liquidations on the 13th of July, totaling $555K, compared to just $71K in long liquidations.
This imbalance implies that bearish traders were caught offside, likely fueling upward price movement as stop-losses and liquidations triggered forced buying.
Notably, the bulk of short liquidations came from Binance and Bybit, highlighting widespread bearish exposure.
These liquidation events often act as catalysts for price surges, especially near key resistance levels. If bears continue to exit, Solana could gain additional momentum for a breakout above the $166 neckline.
Is Solana ready for its next breakout?
Solana’s technical structure presents a compelling bullish setup, driven by a valid cup and handle pattern and sustained trendline support.
The combination of strong spot outflows and short liquidations adds further bullish conviction. However, reclaiming the $166 neckline remains essential for confirming the breakout.
If buyers manage to flip this resistance into support, Solana could rally toward $185 and potentially $220. Until then, the $157–$166 range remains the most critical zone to monitor.
