Solana (SOL) Price Drops to November 2024 Levels, Correction May Be Over

Key Takeaways

• Descending channel breakout potential
• Bullish divergence in RSI supports recovery
• Key Fibonacci levels to confirm reversal

Solana (SOL) has been in a strong corrective phase, forming a well-defined descending channel while tracing a five-wave Elliott Wave structure.

Recent price action indicates that the asset may be at a pivotal moment, with potential signs of a reversal emerging.

The 4-hour and 1-hour charts provide insights into the ongoing trend and possible short-term price movements.

SOL Price Analysis 

The 4-hour chart reveals an extended five-wave corrective structure that started after SOL reached an all-time high at $294.50 on Jan. 19.

The price has been in a well-defined descending channel, making successive lower highs and lower lows. 

The final leg of this correction, labeled as wave (v), reached a key support zone at $168.94, aligning with the 1.0 Fibonacci extension of the previous corrective wave.

A closer look at the 4-hour Relative Strength Index (RSI) shows a strong bullish divergence, with price making lower lows while RSI prints higher lows.

This suggests that bearish momentum is weakening, increasing the probability of an upcoming reversal.

Additionally, price action has bounced off this level, forming a small recovery structure that hints at a possible impulse wave forming.

If SOL can break above the descending trendline resistance, currently around $173, it would confirm the start of a new bullish phase.

However, failure to do so could result in another rejection, potentially pushing the price back toward the $160-$165 region for a retest before a final breakout attempt.

Fibonacci retracement levels from the previous major swing high to the recent low highlight key resistance zones.

The first major resistance stands at $195.81 (0.786 Fibonacci retracement), followed by $216.90 (0.618 level), which coincides with prior consolidation zones.

SOL Price Prediction 

Looking at the 1-hour chart, Solana appears to be in the early stages of an impulsive wave formation following its recent low at $168.94.

The preliminary wave count suggests a five-wave structure in development.

Assuming wave (ii) holds above $168.94, SOL is likely to resume an upward trajectory, with wave (iii) targeting the $180 zone.

Sustained momentum and a successful move above $173.42 would validate the bullish outlook, paving the way for a wave (v) breakout above the descending channel. 

In a more extended bullish scenario, wave (v) could push prices toward the $195.81 level, corresponding with the 0.786 Fibonacci retracement. However, traders should monitor RSI momentum closely. 

If overbought conditions emerge too quickly, a pullback within wave (iv) might occur before the final wave (v) completes.

Conversely, if the price fails to hold above $168.94, the bullish wave count would be invalidated, suggesting a deeper correction toward $160 or lower.

Confirmation of sustained bullish momentum will depend on increasing volume and a decisive breakout above the channel.

Key Levels to Watch

• Immediate Resistance: $173.42 (minor horizontal resistance).
• Key Resistance: $195.81 (0.786 Fibonacci retracement).
• Major Resistance: $216.90 (0.618 Fibonacci retracement).
• Immediate Support: $168.94 (recent low and 1.0 Fibonacci extension).
• Critical Support: $160 (potential retest zone).
• Short-Term Target for Wave (v): Above $216 if momentum sustains.
• Invalidation Zone: Below $168.94, signaling further downside potential.