NAIROBI (CoinChapter.com)— Solana (SOL) traders are closely watching a potential cup-and-handle pattern forming on the weekly chart, suggesting a long-term bullish breakout. Crypto analyst Ali Martinez noted that SOL could surge toward $3,800 if the structure plays out.
However, the short-term outlook remains uncertain, with Solana recently dropping to $112—its lowest level in nearly a year. A looming death cross raises concerns about further downside unless bulls hold key support between $125 and $110.
SOL Forms Bullish Cup-and-Handle—Breakout Ahead?
Ali Martinez pointed out on X that Solana’s price action resembles a textbook cup-and-handle formation. The pattern features a rounded bottom (the “cup”) followed by a slight downward drift (the “handle”) before a potential breakout.
According to Martinez, SOL could see an explosive move toward $3,800 if this structure holds. A screenshot accompanying his post displayed the SOL/USD weekly chart, illustrating the cup-and-handle taking shape.
At current prices near $125, such a rally would represent a staggering 2,940% increase. While such a move appears ambitious, long-term bullish sentiment remains intact as institutional interest in Solana grows.
The 20-day Exponential Moving Average (EMA) at $141.82 acts as resistance, while the Relative Strength Index (RSI) at 37.20 suggests SOL is approaching oversold conditions. Traders watching for a bounce may eye a retest of $141.82 as an early reversal signal.
Death Cross Casts Shadow Over Solana’s Short-Term Outlook
Solana’s price action remains under pressure despite its long-term bullish cup-and-handle formation. On March 12, a death cross formed, as the 50-day moving average (166.77 USDT) crossed below the 200-day moving average (180.19 USDT). This bearish technical signal indicates potential further downside if buyers fail to step in.
The recent chart shows that SOL’s price has been locked in a downward channel, struggling to reclaim lost ground. The altcoin dropped five days in a row before finding temporary support at $112, its lowest level since early 2024.
If SOL fails to hold support between $125 and $110, analysts warn of further downside, with $80 emerging as the next potential target. However, if bulls defend the support zone, SOL could attempt to break above key resistance levels, including the 50% Fibonacci retracement level at $155.22 and the 61.8% level at $161.87.
Meanwhile, the Relative Strength Index (RSI) sits at 41.51, reflecting ongoing bearish momentum but indicating that SOL is not yet in extreme oversold conditions. A rebound could occur if buying pressure increases near the lower trendline of the descending channel.
Institutional Interest Grows as Solana Futures Hit U.S. Market
Despite the mixed technical signals, institutional involvement in Solana continues to expand. The Chicago Mercantile Exchange (CME) is set to launch SOL futures on March 17, marking the first regulated Solana futures contracts in the U.S. following Coinbase’s February launch.
Meanwhile, despite recent volatility, Solana’s ecosystem remains a hub for memecoins, with strong retail engagement. The blockchain’s high-speed, low-cost transactions have kept it attractive to traders even amid broader market uncertainty.
Failed Inflation Proposal Adds to Market Uncertainty
Adding to Solana’s uncertainty, the recent failure of Proposal SIMD-0228 introduced new concerns over network governance and long-term economic stability. The proposal, backed by Multicoin Capital, aimed to transition Solana’s fixed inflation model to a dynamic rate based on staking activity.
With only 43.6% of votes in favor, the proposal failed to reach the two-thirds majority needed for approval. This rejection raises questions about Solana’s economic incentives and whether future governance proposals will face similar resistance.
Solana’s price action remains at a crossroads. If the cup-and-handle breakout materializes, a move toward $3,800 could be in play in the long run. However, the short-term risk of a death cross breakdown remains if SOL loses support.