Solana (SOL) Elliott Wave Analysis: Eyes Breakout as Bullish Divergence Emerg

Solana (SOL) has exhibited a dynamic price structure in recent sessions, navigating through corrective phases within descending channels while showing signs of potential bullish reversals.

Applying Elliott Wave Theory, Fibonacci retracement levels, and RSI momentum, this analysis deciphers SOL’s price action across multiple timeframes to project potential scenarios.

SOL Price Analysis

The 4-hour chart reveals SOL completing a complex corrective structure, marked by a descending channel containing waves W, X, and Y. After peaking around $294.50, SOL entered a corrective phase, retracing towards the $173.42 support zone. 

We saw a brief spike to the horizontal zone but the price maintained above the descending channel support. This region acted as a critical demand zone, sparking a modest recovery since Feb. 3. 

Elliott Wave labeling suggests that SOL has likely completed wave Z of a larger corrective W-X-Y-X-Z pattern. The Relative Strength Index (RSI) shows bullish divergence, indicating weakening bearish momentum as price approaches key Fibonacci levels. 

The price currently tests the 0.618 Fibonacci retracement level at $216.90, a pivotal resistance that could dictate the next major move. A decisive breakout above this level could target the 0.5 ($231.72) and 0.382 ($246.54) retracement levels, signaling a potential bullish reversal. However, failure to breach this resistance may result in a retest of the $195.81 (0.786 Fibonacci) support.

Additionally, observing the volume trends reveals declining bearish pressure, supporting the potential for an upward breakout. The convergence of the descending channel’s upper boundary with the 0.618 Fibonacci level adds confluence to this resistance zone. A sustained move above this area, accompanied by increasing volume, would provide stronger confirmation of a bullish reversal. Conversely, any rejection at this level with heightened selling pressure may reinforce bearish dominance, pushing SOL back toward lower support zones.

SOL Price Prediction

On the 1-hour chart, SOL shows signs of completing an impulsive five-wave structure, with wave (v) approaching the upper boundary of the descending channel. The following corrective ABC pattern suggests a potential short-term pullback, with wave C possibly targeting the $195.81 support (0.786 Fibonacci retracement).

Should SOL maintain support above this level, a bullish reversal could initiate a new impulsive wave sequence. The projected path indicates a breakout from the descending channel, potentially targeting $231.72 (0.5 Fibonacci level) and $246.54 (0.382 Fibonacci level) as bullish objectives. RSI momentum supports this scenario, exhibiting bullish divergence and recovery from oversold conditions.

Furthermore, the wave structure implies that if SOL breaks above the descending channel with strong bullish momentum, the price could accelerate rapidly due to the lack of significant resistance zones until the next Fibonacci levels. 

Market sentiment, along with macroeconomic factors and broader crypto trends, will also play a role in SOL’s trajectory. Monitoring RSI for potential overbought conditions during the rally will help identify possible reversal points, while bullish continuation patterns may confirm sustained upward momentum.

Conversely, if SOL fails to hold above $195.81, it may revisit the $173.42 support zone, with $168.94 acting as the critical invalidation level for the bullish outlook.

Key Levels to Watch

• Immediate Resistance: $216.90 (0.618 Fibonacci level)
• Key Resistance: $231.72 (0.5 Fibonacci retracement)
• Major Resistance: $246.54 (0.382 Fibonacci retracement)
• Immediate Support: $195.81 (0.786 Fibonacci retracement)
• Critical Support: $173.42 (key horizontal support)
• Invalidation Zone: Below $168.94