Solana (SOL) price is in danger of collapsing from the ascending support line that has been in place since the beginning of the year.
Since the line has been in place for such a long period of time, the collapse below means that the sustained increase is over. Therefore, it may cause a sharp decline towards the nearest support.
Solana price risk collapse from long-term structure
SOL price has been rising along with an ascending support line since the beginning of 2023. While doing so, it reached a yearly high of $27.12.
However, the price has been declining since April 20th and is on its way to crashing off the line. Since the line has been in place for 125 days, a breakdown from it would be a critical downward development.
The Relative Strength Index (RSI) is giving a neutral reading. Traders use the RSI as a momentum indicator to assess whether the market is overbought or oversold, and to decide whether to accumulate or sell an asset.
If the RSI reading is above 50 and the trend is up, the bulls still have the advantage, but if the reading is below 50, the opposite is true.
SOL Price Prediction: Will the Correction Continue?
According to the technical analysis and price action from the six-hour time frame, a continuation of the bearish movement in Solana is expected to continue, which leads to a bearish forecast for the SOL price.
This is mainly due to the number of waves. Technical analysts use Elliott Wave theory to determine trend direction by studying long-term price patterns and investor psychology.
The movement in March and April (shaded) appears to be a corrective structure similar to the short-term ABC pattern. Since the movement is bullish, the Elliott wave theory suggests that the prevailing trend is likely to be bearish.
The decline since the yearly rally could also be another larger ABC corrective structure, with a $15 drop expected if A:C waves have a ratio of 1:1 (white).
Although this price level is below the previously identified horizontal support area, it coincides with the 0.618 Fibonacci retracement support level (marked in red).
Fibonacci retracement levels indicate that after a significant price change in one direction, the price will correct or revisit the previous price level before resuming its original direction. As a result, this area is likely to act as a bottom for the price.
Given the above, it can be concluded that the nearest support area is $17. While the next resistance is at $26.
If SOL price rises above $26, this indicates that the trend is still bullish. Therefore, the price may continue to rise towards $32 at least.
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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.