Since June 10, the price of Solana (SOL) has experienced an upward surge. It successfully surpassed a crucial resistance level on June 29. It is currently attempting to break out from an important diagonal resistance area.
Although there were initial indications that the SOL price might reach a new yearly low, recent price action suggests that the upward momentum will persist in the near future.
Solana Price Recovers, Reclaims Crucial Support
The technical analysis of the daily time frame reveals a 53% recovery that commenced on June 10. This rally was started by a long lower wick, which is considered a signal of increased buying pressure.
The significance of this price increase lies in the fact that SOL reclaimed the $17 horizontal area. Following a previous breakdown, this area was expected to act as resistance. However, after a brief rejection on June 20, the SOL price surged above the area. It peaked at $20 on June 30.
The SOL price is attempting to break out from a descending resistance line that has been in place since April 17 (red icon). A breakthrough above this line could further accelerate the increase rate and confirm a bullish reversal.
However, SOL failed to break out on July 6 and created a long upper wick (red icon), considered a sign of selling pressure.
The daily Relative Strength Index (RSI) provides a bullish signal. The RSI is a momentum indicator utilized by traders to assess whether a market is overbought or oversold.
Readings above 50 and an upward trend indicate a favorable bullish market, while readings below 50 suggest the opposite. The RSI has surpassed the 50 mark and is rising, decisively indicating a bullish trend.
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SOL Price Prediction: When Does Wave Count Predict Bottom?
Within the daily time frame, the analysis of wave patterns suggests a positive outlook. Technical analysts utilize the Elliott Wave theory, a method that examines long-term price trends and investor sentiment to determine the direction of the trend.
The wave count indicates that the price of SOL will surpass the resistance line and continue its upward movement toward the next resistance level valued at $26.
According to the wave count, it appears that the SOL price has completed a corrective structure (represented by the black A-B-C pattern) since April 15. This correction is confirmed by the overlap between the low point of wave A and the current high point (indicated by the red line).
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If the count is accurate, the SOL price initiated another five-wave upward movement on June 10 (shown as the white line) and is likely to break through the resistance line. If this occurs, it is anticipated to reach the next resistance level at $26.
However, if the count is correct, the SOL price is currently in wave two of this increase, which is corrective. Thus, the most likely future price scenario would be an initial retracement toward the $17 support area before an eventual breakout.
Moreover, it is important to note that if the SOL price falls back within the $17 support range, the trend will remain bearish. In such a scenario, there is a possibility that the SOL price could decline to $10.
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