Solana Drops Below $100. Is It Time to Worry?
Date: 2024-01-05 Author: Dima Zakharov Categories: BLOCKCHAIN
Solana's Rally Takes a Hit
Solana's token price had been on a remarkable upward trajectory since breaking through a downward resistance line in July 2023. By September, it had tested the same trendline as support, marked in green, and accelerated its growth.
This bullish movement led to a December peak of $126, marking a staggering 610% increase in just 105 days. Along the way, it also surpassed the 0.382 Fibonacci retracement level of the entire downward movement from its all-time high.
However, yesterday's drop pushed Solana's price below this crucial Fibonacci level, turning the previous bullish breakthrough into a deviation, marked in red.
RSI Indicator Remains Bullish
Despite the extremely overbought RSI momentum indicator, it does not show signs of weakness like bearish divergence, which typically warns of an impending peak.
SOL Price Forecast: When Will It Rebound Above $100?
A technical analysis of the daily timeframe suggests that the token has begun a corrective wave. According to Elliott Wave analysis, the most likely scenario is that SOL is in the fourth wave of a five-wave upward movement, marked in white. The daily RSI confirms this possibility, as the $126 peak was accompanied by bearish RSI divergence, marked in green.
Yesterday, the price reached the 0.382 Fibonacci correction support level at $86 and bounced back, marked in green. Cryptocurrency trader Altcoin Sherpa noted this rebound but was disappointed that his entry did not trigger.
The most common pattern for the fourth wave is typically a symmetrical triangle. Therefore, it's possible that the bottom has already been reached, and the price will consolidate within the triangle before making a bullish breakout.
In this scenario, the potential target for the peak of SOL's upward movement would be at $180, a staggering 85% above the current price.
Bearish Breakout Scenario
Despite this bullish forecast, a bearish breakout from the triangle could trigger a 26% drop in SOL's price to the 0.5 Fibonacci correction support level at $73, completing the fourth wave.
