Solana (SOL) has recently experienced a decline in price, dropping below $100. This downward movement has raised concerns about where the coin will find support and whether it will continue falling.
The SOL price had been on an upward trajectory since July 2023 when it broke through a descending resistance trend line. It reached its peak at $126 in December, marking the culmination of its upward movement.
However, SOL failed to break out from a long-term horizontal resistance area, and a recent downturn caused the price to dip below the Fib retracement resistance level. This has led some analysts to classify the prior breakout as a deviation.
Notably, SOL created successive bearish weekly candlesticks for the first time since October 2023 and closed below $100. This decline has raised concerns about the coin’s future performance.
When assessing market conditions, traders often look to the Relative Strength Index (RSI). Currently, the RSI is falling and in overbought territory, but it has also generated a hidden bullish divergence. This mixed signal adds to the uncertainty surrounding SOL’s price direction.
Using Elliott Wave theory, some analysts suggest that SOL is currently in the fourth wave of a five-wave upward movement. The daily RSI exhibited a bearish divergence at the $126 high, and the price recently rebounded from the 0.382 Fib retracement support level at $86. Some analysts predict further downside with the price potentially falling to the 0.5 Fib retracement support level at $72.
However, others believe that the bottom of the corrective phase has been reached and that SOL could consolidate within a symmetrical triangle before experiencing a breakout. If this scenario unfolds, a potential target for the upward movement could be $180, representing a 90% increase from the current price.
Despite this bullish outlook, if the price breaks down from the triangle, it could invalidate the bullish scenario and lead to a 25% decrease to the 0.5 Fib retracement support level at $72.
Overall, the future direction of SOL’s price remains uncertain. Traders and investors will need to closely monitor key levels of support and resistance to assess whether the recent decline is merely a correction or the start of a more significant downward trend.