Doing so will mean that the previous upward movement has definitively come to an end. As a result, it could lead to the further acceleration of the ongoing decrease.
SOL Price Loses Long-Term Structure
The SOL price had increased alongside an ascending support line since the beginning of the year. While the line led to a new yearly high of $27.12 on Feb. 20, the price is currently in the process of breaking down from the line.
Since the line has been in place for 115 days, a breakdown from it will mean that the previous upward movement is complete, and a correction has begun.
The RSI also supports the breakdown. The Relative Strength Index (RSI) is a momentum indicator used by traders to evaluate whether a market is overbought or oversold and to determine whether to accumulate or sell an asset. Readings above 50 and an upward trend suggest that bulls still have an advantage, while readings below 50 indicate the opposite.
In the case of SOL, the RSI decreased below 50 (red icon), indicating a bearish trend and supporting the continuation of the decrease. If the downward movement continues, the closest support will be at an average price of $17.
Solana Price Prediction: Has the Correction Just Begun?
The technical analysis from the short-term six-hour time frame supports the continuation of the downward movement and gives a bearish Solana price prediction. The wave count is the main reason why this is the case.
The movement in March and April (highlighted) resembles an A-B-C corrective structure (black). Since the move is going upward, Elliott Wave theory states that the dominant trend is likely downward. Technical analysts utilize the Elliott Wave theory to ascertain the trend’s direction by studying recurring long-term price patterns and investor psychology.
So, the decrease since the yearly high could be another larger A-B-C (white) corrective structure. Giving waves A:C a 1:1 ratio will lead to a low of $15.
While this is below the previously outlined horizontal support area, it coincides with the 0.618 Fib retracement support level (red). Fibonacci retracement levels operate on the principle that after a significant price change in one direction, the price will retrace or revisit a previous price level, before resuming in its original direction. So, the area is likely to act as the bottom.
Despite this bearish Solana price forecast, increasing above $26 will mean that the trend is still bullish. In that case, the Solana price may continue to grow toward at least $32.
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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.