Solana Forms Its Third Lower High of the Year – SOL Price Likely to Underperform Bitcoin
Here's Why Solana Can Underperform Bitcoin in June | Credit : Derek Fenech
Key Takeaways
- The SOL price has corrected 21% since its yearly high of $210 on March 18.
- Solana has consolidated inside a symmetrical triangle for the past 98 days.
- The SOL/BTC chart shows weakness, indicating the local top is in place.
Solana was one of the biggest gainers in the first portion of 2024, outperforming all other large market capitalization cryptocurrencies, including Bitcoin. However, the trend has changed since March, and SOL shows weakness even when the crypto market bounces.
The SOL/BTC chart gives particularly ominous signs, suggesting that a local top is in place. Will this lead to a prolonged Solana correction against Bitcoin, or will the price regain its footing, and move to new highs instead?
Solana Consolidates Inside Triangle
The daily time frame Solana price chart shows that SOL has traded inside a symmetrical triangle for the past 98 days. During this time, the price reached its yearly high of $210 on March 18. However, SOL has fallen since, creating successive lower highs. The most recent one was on May 21, which confirmed that SOL trades inside a symmetrical triangle.
In turn, this also suggests the Solana price is in wave four of a five-wave upward movement. Besides aligning with the sub-wave count (yellow), the possibility becomes more likely since triangles are the most common pattern in wave four.
SOL currently trades in the upper portion of the channel, above the $160 horizontal support area. If the count transpires as expected, SOL will break down from this area and bounce at the triangle’s support trend line.
The MACD and RSI supports this consolidation. While the MACD is above 0 and the RSI above 0, they are both trending downward, a sign of a mixed trend. After the SOL price completes its correction and breaks out from the triangle, it can increase to a new all-time high.
While it is possible the wave count is a bearish A-B-C structure, which will take the SOL price to $100, the fact that symmetrical triangle are more common in wave fours supports the first scenario.
Solana Likely to Underperform Bitcoin
While the Solana/USD chart predicts more consolidation before an eventual breakout, the SOL/BTC chart is bearish. SOL reached a yearly high of ₿0.0031 in March, similarly to the Solana USD pair. However, the ensuing decrease took the price below the ₿0.027 resistance area.
Additionally, this created a head and shoulders, considered a bearish pattern. This pattern was combined with bearish divergences in the weekly RSI and MACD (green), supporting the bearish outlook.
So, the price action below resistance, bearish pattern and indicator readings all suggest more downside is likely. This decrease will probably accelerate once the SOL price breaks down below the neckline of the head and shoulders pattern. In that case, the next support will be at ₿0.0014. The 0.618 Fibonacci retracement support level creates this support.
Conversely, a weekly close above ₿0.0027 will mean the trend is still bullish. Currently, there are no signs that point to this being the correct future SOL price prediction.
Solana to Consolidate and Underperform Bitcoin
The Solana USD price is likely to continue consolidating before an eventual breakout. However, the Solana Bitcoin pair is bearish, suggesting the price has reached its temporary top and will correct in the near future.
Solana Price Recovers and Reclaims $150 – What Shape Will SOL Correction Follow?
