Analyzing Solana’s (SOL) Price Trends and Predictions After Its Yearly High

Analyzing Solana’s (SOL) Price Trends and Predictions After Its Yearly High

Crypto News – Solana (SOL) has seen a decline in its price since November 16, when it reached its annual peak of $68.20. Despite this dip, SOL is still trading above a crucial horizontal support level. The question is, does this suggest that the overall trend remains bullish?

Solana’s Journey Above $50

The price of SOL has experienced significant growth since the beginning of the year. In July, Solana broke free from a descending resistance trend line that had been in place since its all-time high.

After confirming this trend line as support (indicated by the green icon) in September, SOL’s price gained momentum, eventually reaching a new yearly high of $68.20 just last week.

During this upward trajectory, SOL also managed to break through two significant resistance levels.

The Role of RSI

Traders often turn to the Relative Strength Index (RSI) as a momentum indicator to gauge whether a market is overbought or oversold. This helps them decide whether to accumulate or sell an asset.

Generally, when the RSI reading is above 50 and the trend is upward, bulls have the upper hand. However, if the RSI dips below 50, the situation tends to favor bears. Currently, the weekly RSI is on the rise but remains in overbought territory.

Analyst Insights

Cryptocurrency traders and analysts on platform X hold a bearish view of the short-term trend.

Technical analysts employ the Elliott Wave theory to determine the direction of a trend by examining recurring long-term price patterns and investor psychology.

Metakaku has tweeted a bearish scenario, suggesting that SOL’s price may soon reach its peak and initiate a downward movement. He explained:

“We have fully achieved our upside target on SOL, leaving us with the potential for a completed correction on a macro scale. If this scenario holds, the expectation is for the price to decline from here and establish a new low, as depicted in the third chart. This isn’t about having a bearish bias against SOL; it’s a straightforward application of Elliott Wave theory, and the subwaves align closely. Take it as a word of caution for the bulls.”

Sherlock also tweeted about a bearish head and shoulders pattern, indicating that its breakdown could trigger a more pronounced downward movement.

SOL Price Prediction: Will the Price Rise Again?

Taking a closer look at the daily timeframe wave count, there appears to be a positive outlook.

Starting in June, SOL appears to have embarked on a five-wave upward movement (depicted in white). Within this, wave three extended significantly, being 2.61 times the length of wave one.

If this wave count is accurate, SOL is currently in wave four, which is typically a corrective phase. It’s uncertain whether wave four has concluded or if further correction is in store. In the latter case, the price may return to the long-term support level of $48 before rebounding.

This wave count implies that the overall trend remains bullish, and SOL’s price may see further increases.

Confirmation of the bullish scenario would come with SOL surpassing its annual high of $68.4, potentially leading to a 50% surge towards the next resistance at $86.20.

Nevertheless, it’s important to note that a close below the critical $48 horizontal support level could trigger a 50% drop to the nearest support at $28.