Solana’s latest price rally comes in the wake of new Bitcoin all-time highs above $65,000.
Solana’s SOL coin rallied higher on Oct. 21 as traders shifted focus from Bitcoin (BTC) to the most promising altcoins.
Notably, the price of SOL increased by more than 11% to over $196 a token, the highest level since Sept. 11. Combined with the gains recorded in the previous 36 hours, SOL was up by as much as 26%.
SOL/USD daily price chart. Source: TradingView
Capital rotation in play?
A new Bitcoin all-time high price on Oct. 20 triggered price rallies across the altcoin market as well.
For instance, Ethereum’s native Ether (ETH) token posted better intraday profits on Oct. 20, closing 7.32% higher around $4,170. On Oct. 21, the second-largest cryptocurrency rallied further to $4,374, just $10 shy of its record high at $4,384 on Coinbase.
Conversely, Bitcoin corrected by more than 3.5% to below $65,000. As a result, the ETH/BTC exchange surged by more than 5% to reach an intraday high of 0.06289 BTC.
Similarly, SOL’s performance against the U.S. dollar over the last two days came out better than Bitcoin. That prompted SOL/BTC to climb by more than 8% on Oct. 21 to hit 0.0026772 BTC, showing that traders rotated capital out of the Bitcoin market to enter the Solana market.
SOL/BTC daily price chart. Source: TradingView
Bullish pennant triggered
Solana’s latest price rally also appeared as a bullish breakout out of its multi-month consolidation channel.
SOL started consolidating sideways inside a triangle-like trading range after rallying by more than 200% in the August–September period. As a result, the formation of more than two higher lows and lower highs, coupled with a declining trade volume, raised the prospect of the channel being a pennant.
Since a pennant is typically a trend continuation indicator, their formation on the SOL chart after a massive price rally raised its prospects of sending SOL prices higher. Thus, the breakout from Oct. 20 now eyes an extended run-up, with its target sitting at a length equal to the size of the previous uptrend.
SOL/USD daily price chart featuring a bullish pennant. Source: TradingView
In other words, the price target for SOL could be as high as $250 before the end of the month. However, a retest of the pennant’s upper trendline as support would risk invalidating the bullish setup.
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