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2 Reasons Why Solana (SOL) Price Might Pull Back

2 mins
Updated by Ali M.
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In Brief

  • Solana (SOL) cryptocurrency has seen a 500% price increase YTD, but may be due for a correction.
  • The TD Sequential Indicator and RSI suggest SOL may have reached a peak, indicating a potential trend reversal.
  • The Fibonacci Retracement Indicator suggests a possible decrease to $47.6 or even $35.8 before a potential rise.
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Solana (SOL) is among the top-performing cryptocurrencies in the market. It has recorded a price increase of over 500% year-to-date, climbing from $9.9 to $68.4.

Despite these substantial gains, SOL could be poised for a brief correction before the uptrend resumes.

SOL Price Shows Signs of Exhaustion

The Tom DeMark Sequential Indicator, commonly called the TD Sequential, suggests that SOL may have reached a local peak. It has presented a green nine candlestick on Solana’s weekly chart, a bearish formation.

This sell signal aligns with the Relative Strength Index (RSI) hovering with the overbought territory. The RSI stands at 75 on Solana’s weekly chart, indicating a potential trend reversal or corrective price pullback.

If these bearish signs materialize, Solana could see a spike in profit-taking, triggering a correction that may last one to four weekly candlesticks.

Solana (SOL) Price Chart
Solana (SOL) Price Chart. Source: Tradingview

The TD Sequential is a technical analysis tool designed to identify potential buying and selling opportunities by predicting trend exhaustion points. It is based on a series of numbers and rules, focusing on two components: TD Setup and TD Countdown. The indicator’s main purpose is to detect trends that have become overextended and are likely to reverse.

Conversely, the RSI serves as a momentum indicator, comparing the magnitude of an asset’s gains on its upward price days to the magnitude of its losses on its downward price days.

Solana Price Prediction: A Downswing Before Higher Highs

One can identify potential support and resistance levels by employing the Fibonacci Retracement Indicator. This technical tool uses a series of numbers to help predict potential reversal points after a significant price movement. It does so by dividing the vertical distance between an asset’s high and low points by key Fibonacci ratios, which are 23.6%, 38.2%, 50%, 61.8%, and 78.6%.

The Fibonacci Retracement Indicator suggests an increase in selling pressure could push Solana down to the 78.6% retracement level at $47.6. A steeper correction to the 61.8% retracement level at $35.8 could occur if this support level fails.

Solana (SOL) Price Prediction
Solana (SOL) Price Chart. Source: Tradingview

In conclusion, to negate this pessimistic view, SOL’s price must close above the recent high of $68.4 on a weekly candlestick. Achieving this could attract interest from sidelined investors, potentially driving Solana’s price to a new yearly high of $108.

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In line with the 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, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Ali Martinez, a dynamic content strategist, graduated from Boston University with a double major in Marketing and Digital Media Management. Excelling in SEO and brand storytelling, he played a pivotal role at Binance as a Content Manager, harmonizing engaging narratives with strategic marketing goals. Previously, as Senior Managing Editor at FXStreet, he ensured content consistency and optimization, enhancing brand presence. Ali's extensive experience also includes contributing to the crypto...