Solana has fallen from its December 25 high of $126. Yesterday the price of SOL dropped below $100. Let’s figure out whether the token will find the ground under its feet
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The Solana rally is finally winding down
The price of the Solana project token has been growing since the breakdown of the descending resistance line in July 2023. Thereafter, in September, it tested the same trend line for strength as support (green icon) and accelerated its growth rate.
The upward move took the price to a December high of $126, marking a 610% gain in 105 days. During the growth process, the Fibonacci level of 0.382, the correction of the entire downward movement from the historical maximum, was also broken.
However, yesterday’s decline caused the SOL price to fall below this Fib level. This turned the previous bullish breakout into a rejection (red circle).
Source: TradingView
Although the RSI momentum indicator is extremely overbought, it is not showing the same signs of weakness as a bearish divergence warning of a top being formed.
Read also: Trader turned 1 Solana into $2 million
SOL forecast: when the price recovers above $100
Technical analysis of the daily timeframe shows that the token has begun a correctional wave.
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The most likely scenario within Elliott wave analysis suggests that SOL is in the fourth wave of a five-wave upward movement (White color). The daily RSI confirms this possibility, as the $126 high was accompanied by a bearish RSI divergence (green color).
Yesterday the price reached the 0.382 Fib support level of correction at $86 and rebounded (green icon). Cryptocurrency trader Altcoin Sherpa noted this bounce but was disappointed that his entry didn’t work out.
The most likely pattern for the fourth wave is usually a symmetrical triangle. Thus, it is possible that the bottom has already been reached and the price will consolidate in a triangle before making a bullish breakout.
In this case, the potential target for the top of the SOL upward movement would be located at $180, 85% above the current price.
Source: TradingView
Despite this bullish outlook, a bearish breakout from the triangle could trigger a 26% decline in SOL to the 0.5 retracement Fib support level at $73, completing the fourth wave.
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2024-01-04 15:00:48
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