Solana (SOL) Price Drops 23% and Hits Oversold Zone — Traders Eye Bounce

Key Takeaways

• SOL completed a five-wave impulse, with Wave 5 topping at $294.
• Bearish correction continues despite RSI divergence and brief breakouts.
• The current structure favors a final wave down, possibly toward $70.
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After stabilizing at a zone around $120 since mid-March, SOL finally broke down, depreciating by 23%.

It reached the oversold zone with some indication that a reversal might happen soon, but there are still no bullish signs.

The higher timeframe chart provides a broader Elliott Wave structure, while the lower timeframe chart is used to identify short-term wave developments and precise price reactions. 

SOL Price Analysis

The 4-hour chart shows a completed five-wave impulse, with Wave 5 reaching $294 on Jan. 19.

The high was followed by the start of a WXYXZ corrective phase, forming a descending channel.

A second Wave X made a breakout above the descending channel on March 2, with the price rising to $180, 

However, after encountering resistance, it reversed, continuing its downward trajectory and invalidating the bullish outlook. 

The price found support at around $118 (0.618 Fibonacci retracement), a key horizontal support zone. 

On March 11, recovery started, leading to another descending channel breakout and the formation of the ascending one.

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This was yet another corrective structure as it ended at a lower high of $148. 

The price action formed what appears to be an ABC corrective wave, with wave C currently near completion.

The Relative Strength Index (RSI) reached the oversold zone at 22.50%, potentially indicating a downtrend exhaustion.

A reversal looks likely, but the overall structure still remains bearish, which is why we would be primarily expecting further downtrend continuation.

SOL Price Prediction

On the 1-hour chart, SOL appears to be in the final stages of a corrective Wave (iii), unfolding as a possible C wave of that last ABC correction. 

The RSI on the 1-hour chart shows a strong bullish divergence—the price made a lower low while the RSI posted a higher low, signaling a likely end to the corrective leg. 

If this interpretation holds, the next upward wave would be Wave (iv), targeting the $105 zone. 

If Wave (iii) extends lower, the invalidation level would be a clean break below $90, disrupting the impulsive structure and suggesting a deeper downfall.

If the price remains above this level and the RSI maintains a bullish divergence, an upturn is more likely.

However, according to our count, this should be a corrective increase in wave (iv) before a final leg down, targeting values of around $80 or even a 0.786 Fib level of $70.48.

Despite the bearish outlook, if the price makes a sharp upturn and advances past the $120 area (green zone), we could start to consider a bullish reversal.

Key Levels to Watch

• Immediate Resistance: $105 (projected Wave (iv) retracement target).
• Bullish Reversal Trigger: $120 (horizontal zone).
• Immediate Support: $90 (invalidation level for bullish scenario).
• Primary Bearish Target: $80 (final leg down zone).
• Critical Support: $70.48 (0.786 Fibonacci retracement).