Solana (SOL) price has been declining since hitting a high of $126 on December 15, 2023. Although SOL managed to consolidate above the descending resistance line, the asset is still trading inside a symmetrical triangle.
Solana Seeks Solid Ground for Support
Technical analysis of the daily timeframe shows that the price of SOL has been rising along an ascending support line since October 2023. The movement culminated in a high of $126.
Since then, the price has fallen, forming several long upper wicks, before rebounding and consolidating above a rising support line that has been in place for 95 days. The daily Relative Strength Index (RSI) is bearish. Before the fall, the indicator formed a bearish divergence and dropped to 50.
What Analysts Say?
Well-known crypto traders and analysts on Twitter have differing opinions regarding the future dynamics of Solana. @MuroCrypto is bullish. He wrote about the breakout and retest, predicting that the price would rise.
Also $SOL
clean retest imo https://t.co/X6zBBLid5m pic.twitter.com/cGqpYelbuu
— Muro (@MuroCrypto) January 18, 2024
@Bluntzcapital supports his opinion and makes similar arguments. Many experts believe that Solana is gearing up for a thrilling breakout and retest phase, signaling a promising rise in its value. The dynamic shift suggests that it will gain strong momentum.
ok that downtrend looks broken now, only a matter of time before the random 10% pump out of nowhere that catches everyone off guard and kickstarts the next mark-up$SOL pic.twitter.com/PM8V9AxTMp
— Bluntz (@Bluntz_Capital) January 17, 2024
Solana Price Analysis: Mixed Indicators and Potential Breakout in Short-Term Chart
The 6-hour time frame is not helpful in determining the direction of the SOL trend, as the price action is sending mixed signals. Although the asset managed to break through downward resistance and confirm it as support, the presence of a short-term symmetrical triangle on the chart hints at a breakout.
Wave analysis confirms the possibility of developing such a scenario. The most likely calculation suggests that the triangle is part of wave B in an ABC correction structure. A wave A:C ratio of 1:0.618 will result in a low around $78. A similar goal is achieved by projecting the length of the triangle onto the breakdown level.
| Note: Wave analysis, or Elliott wave principle, is one of the ways to analyze the market. It helps you find a profitable moment to buy cryptocurrency or another asset. |
However, a breakout of the triangle will mean that the local bottom has been reached. Solana could then rise 18% to the next resistance at $117.
In terms of technical updates, Solana network is looking for a new tool called “Firedancer”, created by “Jump Crypto”. This update will make validators’ performance even faster and much more reliable, adding variety to the system.
