Solana’s 23% Weekly Decline Might End Soon as Reversal Looms

Solana (SOL) has been one of the most watched cryptocurrencies due to its rapid price movements and significant market interest.

Following a strong rally earlier in the year, SOL has entered a corrective phase, experiencing notable volatility as it tests key support and resistance levels.

Now that it has reached its key support zone after a prolonged period of declining price action, a recovery looks likely, but will it lead to a new bull phase?

SOL Price Analysis

Solana (SOL) has experienced significant volatility, testing its Fibonacci levels for support and resistance. It made a sharp downturn after reaching an all-time high near $264 on Nov. 22.

Initially, it was kept in a descending channel, but since Dec. 18, the momentum increased, causing another 21% decline. 

On Sunday, it found support at around $173.42 (61.8% Fibonacci level). The consolidation here indicates a potential reversal point, with the daily Relative Strength Index (RSI) suggesting oversold conditions.

The current structure showcases a potential wave formation with key support holding in the $173-$176 zone. A rebound from this area could lead to a retest of higher Fibonacci levels.

However, if bearish momentum persists, further declines might target the 78.6% level near $152.

SOL’s price action reflects an overall corrective trend following its recent rally.

The breakdown of the symmetrical pattern has reinforced selling pressure. Still, the base support of nearly $173 is critical for bulls to defend and maintain a broader uptrend.

Key Observations

• SOL peaked at $264 before entering a corrective phase.
• Support is evident at $173.42, aligning with the 61.8% Fibonacci level.
• RSI indicates oversold conditions, hinting at potential upward momentum.

SOL Price Prediction 

Solana (SOL) appears to be completing a corrective wave structure (W-X-Y) with a potential “C” wave ending near $173.42 (61.8% Fibonacci level).

The price consolidates at this key support level, suggesting that if bullish momentum builds, it may be a reversal zone for the next upward movement.

The Elliott Wave structure shows potential for a recovery toward $193.20 (50% Fibonacci) or $209.93 (38.2% Fibonacci) as key resistance levels. A confirmed breakout from these levels could target $230.64 (23.6%) and higher. However, failure to hold $173 could lead to a further downside toward $152.65 (78.6%).

The potential bullish scenario suggests an upward move after testing support, but a retest of lower levels is possible before a rally. After the expected rise, a significant indication will be given: whether SOL will stay on a higher low. 

Failure to do so will mean that the price is still in a downtrend while holding above the support zone will indicate that a larger uptrend could develop. 

Key Observations

• Support: $173.42 (61.8% Fibonacci level), critical to maintaining bullish potential.
• Immediate Resistance: $193.20 (50% Fibonacci level).
• Higher Resistance Levels: $209.93 (38.2%) and $230.64 (23.6%).
• Downside Target: $152.65 (78.6%) if $173 support fails.
• Elliott Wave Suggestion: A corrective structure may end, with a potential bullish reversal forming.

About the Author

Nikola Lazic

Nikola Lazic is a cryptocurrency analyst and investor working in the industry since 2017. He holds a bachelor's degree in Sociology, which enables him to better understand the psychology behind the crowd´s positioning. Consequently his preferred analytical tool is Elliott Wave Theory in combination with price action analysis.

Combining his experience in trading and investing with knowledge in content writing he strives to bring the most accurate and actionable information.

Expertise: Cryptocurrencies, Technical analysis, Elliott Wave Theory, On-chain metrics, Research reports.

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