Since June 10, the price of Solana (SOL) has seen an upward movement. It has successfully surpassed the crucial resistance level on June 29th. It is currently trying to break out of an important Qatari resistance area.
Although there are initial indications that the SOL price may reach a new yearly low, the recent price action suggests that the bullish momentum will continue in the near future.
Solana price is recovering, regaining critical support
Technical analysis on the daily time frame reveals a 53% recovery that started on June 10th. This rally started with a long lower wick, which is a sign of increasing buying pressure.
The significance of this price increase lies in the fact that SOL has reclaimed the horizontal area of $17. After the previous crash, this area was expected to act as resistance. However, after a short rejection on June 20, the price of SOL rose above the area. It peaked at $20 on June 30th.
SOL price is trying to break out from the descending resistance line that has been there since April 17th (red icon). A break above this line could accelerate the rate of increase and confirm a bullish reversal.
However, SOL failed to break out on July 6 and created a long upper wick (red symbol), which is a sign of selling pressure.
The daily Relative Strength Index (RSI) is providing a bullish signal. The RSI is a momentum indicator that traders use to assess whether the market is overbought or oversold.
Readings above 50 and bullish indicate a favorable bull market, while readings below 50 indicate the opposite. The RSI has crossed the 50 level and is on the rise, decisively indicating a bullish trend.
SOL Price Prediction: When does the wave count predict the bottom?
Within the daily timeframe, analysis of wave patterns indicates a positive outlook. Technical analysts use the Elliott Wave theory, a method that examines long-term price trends and investor sentiment to determine the direction of a trend.
The number of waves indicates that SOL price will break the resistance line and continue its upward movement towards the next resistance level of $26.
According to the wave count, SOL price appears to have completed a corrective structure (represented by the black ABC pattern) since April 15th. This correction is confirmed by the overlap between the low point of wave A and the current high point (marked by the red line).
If the count is accurate, SOL price started another five-wave upward move on June 10 (shown by the white line) and is likely to breach the resistance line. If this happens, it is expected to reach the next resistance level at $26.
However, if the number is correct, the SOL price is currently in the second wave of this increase, which is corrective. Thus, the most likely future price scenario is an initial correction towards the $17 support area before the final breakout.
Furthermore, it is important to note that if SOL price falls again within the $17 support range, the trend will remain bearish. In such a scenario, there is a possibility that the price of SOL will drop to $10.
For the latest cryptocurrency market analysis from BeInCrypto, click here
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.