Home / Analysis / Crypto / Technical Analysis / Solana’s Bullish Wave Count Intact Despite Market Correction – Is a SOL Price Breakout Imminent?

Solana’s Bullish Wave Count Intact Despite Market Correction – Is a SOL Price Breakout Imminent?

Last Updated 4 mins ago
Valdrin Tahiri
Last Updated 4 mins ago

Key Takeaways

  • The SOL price increased over 13% since its $122 low on June 24.
  • Solana  has led Layer-1 blockchains in transactions and monthly users.
  • Is the SOL correction over or will July bring more downside instead?

The SOL price has corrected over 30% since its yearly high of $210 reached on March 17. However, the price regained its footing on June 24 by bouncing, creating a bullish candlestick and saving a long-term horizontal support area.

Despite an ongoing crypto market correction, the SOL price has not broken down from its horizontal support area. Rather, it has created several higher lows, a sign of a potential bullish trend.

Will this bounce mark the end of the correction, or is there more downside to come? If Solana has completed its correction, how long until it reaches a new all-time high? Let’s find out!

Solana Bullish Trend Intact Despite Market Correction

The most likely Solana wave count suggests the SOL price has corrected in what is likely wave four since March. The decline led to a low of $116 on April 13. Solana has created higher lows and lower highs since, creating a symmetrical triangle pattern, common in wave fours.

On July 5, SOL seemingly broke down from the triangle. However, it immediately reclaimed it, creating a bullish candlestick in the process (green icons). If the sub-wave count is correct, SOL has started sub-wave D, which will take it to the triangle’s resistance trend line near $160.

Solana All-Time High
SOL/USDT Daily Chart | Credit: Valdrin Tahiri/TradingView

Technical indicators in the daily time frame support this possibility. Both the RSI and MACD have generated notable bullish divergences (green), a sign that often precedes bullish trend reversals. A breakout from the triangle will confirm the wave count and can lead to a new Solana all-time high at $267.

Solana Leads On-Chain Activity

The Solana blockchain has led Layer-1 activity over the past week and month. This can be seen by looking at active users and the transaction count. Solana has by far the largest transaction count in the past 7 days, reaching 1.7 billion in the past seven days. TRON is second at only 46.8 million.

Solana also leads in monthly users, having 14.5 million. TRON is also second at monthly users at 13.9 million. Nevertheless, it is worth mentioning that TRON is actually outpacing Solana in the short-term, as evidenced by the weekly users. 

Active Users
Solana Active Users | Credit: Token Terminal

However, because of its minuscule fees, Solana’s revenue  is not close to its all-time high. Revenue reached an all-time high of $2.47 million on March 18, while it currently is at only $472,370. The decentralized exchange Raydium provides the bulk of this revenue at $960,970 weekly.

The decrease in revenue is likely influenced by the crash of memecoins, which became extremely popular in Solana and especially in the Raydium exchange. In March, the exchange was doing $1.67 million of revenue  weekly.

SOL Bounces at Long-Term Support

The weekly time frame SOL price chart shows a breakout above the $135 horizontal resistance area in February 2024. The increase led to a new yearly high of $210 in March. While SOL has fallen since, creating a lower high (red icon), it still trades above the $135 area, having validated it twice (green icons). The trend can be considered bullish as long as it does.

Solana Long-Term Movement
SOL/USD Weekly Chart | Credit: Valdrin Tahiri/TradingView

Despite this positive price action, the MACD and RSI lean bearish. While the MACD is positive and the RSI is at 50, both are trending downward. Additionally, the MACD has made a bearish cross (red circle).

The daily time frame chart is positive for several reasons. Mainly, it shows a triple bottom pattern inside the $125 area. The most recent Solana price bounce was on June 24 and created a bullish hammer candlestick (green icon).

Moreover, the daily MACD generated a bullish divergence and has nearly made a bullish cross. As a result, the time frame suggests an upward movement toward the resistance trend line at $160 is expected.

Triple Bottom
Solana / USD Daily Chart | Credit: Valdrin Tahiri/TradingView

A breakout above the trend line will confirm the trend is bullish. If that happens, the wave count can help determine the next high.

Solana Price Prediction: Wave Count Forecasts New All-Time High

The most likely wave count implies SOL is in wave four of a five-wave increase (white) that started in December 2022. Wave three concluded with the yearly high of $210, starting the current correction, which is likely wave four.

While this is the most likely scenario, the exact sub-wave count inside this corrective wave differs. The main possibility is that wave four has developed into a symmetrical triangle (yellow), which is the most common pattern for a wave four.

If this is the case, the Solana price will complete sub-waves D and E before beginning another upward movement.

Solana Wave Count
SOL/USDT 3-Day Chart | Credit: TradingView

The next possibility is more bearish (black), suggesting SOL is instead completing an A-B-C corrective structure. If so, it will break down from the triangle and complete sub-wave C below the sub-wave A bottom of $116.

While the exact target for the wave five high will depend on the bottom of wave four, a preliminary one is at $267, given by the 1.61 external Fibonacci retracement of sub-wave A. This will be a new all-time high price.

Solana to Reach New All-Time High

The SOL price has shown strength by bouncing at a long-term horizontal and diagonal support area. Both the long-term readings and wave count forecast new highs this summer. A breakout from the triangle will confirm the upward trend. Then, the ensuing upward movement could take SOL to a new all-time high.

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
Was this Article helpful? Yes No