The Solana (SOL) exchange rate has finally broken below the upward support line, which had previously persisted on the chart for 128 days
This bearish breakout indicates that the Solana growth phase that began in January is now over. If that is indeed the case, we are looking at a correction in the near future.
SOL has made a bearish breakout of its long-term structure
SOL is the native token of the blockchain Solana, created by Anatoly Yakovenko.
It uses a unique consensus mechanism, which is a combination of Proof-of-Stake (PoS) and Proof-of-History (PoH) algorithms.
As the results of technical analysis show, SOL has been rising along the uptrending support line since early 2023. On February 20, the market hit a high of the year at $27.12.
However, on April 20, a declining high appeared on the chart, and the price has been declining since then.
On May 6, the Solana broke the rising support line that it had been following for 128 days.. The loss of such long-term structures usually causes a significant market movement.
Loss of such long-term structures usually causes a significant market movement.
The Relative Strength Index (RSI) is now showing a bearish mood. It is a momentum indicator which indicates if the market is overbought/oversold, depending on whether it is above or below 50.
In the case of SOL, on the same day that price had a bearish breakout (white line), the RSI dipped below the 50 mark, reinforcing the bearish move in price.
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How long will the Solana correction last?
In the meantime, wave analysis of the 6-hour chart also indicates the likelihood of a continued downtrend in the coin.
The price movement since March looks like a short-term A-B-C corrective structure (white). If this prediction is correct, then SOL is now in wave C of this correction.
The support area is located around $15 (the Fibo level of 0.618 of the correction (black color) and the ratio of waves A:C is 1:1 (white color).
The support area is located around $15 (the Fibonacci level of 0.618 of the correction (black) and the ratio of A:C waves as 1:1 (white))
The Fibonacci levels are traditionally considered the most probable springboards for stopping and reversing the price after a major advance in any one direction.
As expected, at these levels, the market can win back some of the distance traveled and only then resume the movement in the original direction. In addition, they can determine the limits of a price move.
It is possible, therefore, that this area could play the role of a foundation. So it is possible that this area could play the role of a base.
So the nearest support is at $15 and the nearest resistance is at $26. The most likely scenario for SOL is a drawdown in the direction of this support.
However, if the token takes the barrier of $26, it will be a signal of a bullish trend and might support an increase towards at least $32.