Solana (SOL) Road to All-Time High Delayed: A Temporary Pause in the Rally

Key Takeaways

• On-chain data shows that Solana’s price still offers a good risk-to-reward ratio.
• The altcoin has completed a wave correction, with another bounce expected.
• Solana’s price rally to $300 remains likely amid rising bullish momentum.

On Jan. 19, Solana (SOL) price hit a new all-time high. This coincided with the launch of the TRUMP memecoin last Saturday.

Today, the Solan price is 10% down from that height but has increased 5% in the last 24 hours.

While this setback may have dampened bullish sentiment, several indicators reveal that the decline is a temporary pause, not the end of SOL’s journey to a new peak.

Solana Recovers From Minor Dip

The Sharpe ratio is one metric suggesting that the SOL rally is not over. The Sharpe ratio measures the potential return an asset can offer.

A higher Sharpe ratio indicates that the asset can provide a better return than the risk involved. On the other hand, when the ratio is negative, it indicates that it could be the wrong time to buy the asset, as the risk-to-reward ratio might not be worth it.

Based on Messari’s data, Solana’s 90-day Sharpe ratio fell to 1.60 on Jan. 6. As of this writing, the metric’s reading is 2.28.

This current ratio represents a 10% increase in the last seven days, suggesting that Solana’s price is likely to avoid a double-digit correction in the short term.

Instead, if the ratio remains positive, there is a high chance that the value will continue to climb, which could lead to SOL’s price reaching $300.

On Jan. 22, Solana’s price dropped below the 20-period Exponential Moving Average (EMA) on the 4-hour chart. This decline indicates that the altcoin’s uptrend has ended.

However, this trend changed as SOL is now above the 20 EMA (blue) and 50 EMA (yellow). If sustained, Solana’s price could surpass its all-time high of $294.33.

In addition, SOL has completed an ABC Elliot Wave correction. As seen below, the token might experience a short-term decline to the support at $244.07, acting as wave D.

After this happens, Solana’s price could bounce off the short and head toward $300, completing the five-wave ABCDE pattern in the process.

SOL Price Prediction: $300 Still Coming

Solana’s daily chart also suggests a similar outlook. During this timeframe, SOL traded highly above the descending trendline, influencing the downtrend to $182 on Jan.15.

The Moving Average Convergence Divergence (MACD) is positive, indicating that momentum around SOL is positive. Also, the 12 EMA (blue) has crossed above the 26 EMA (orange), validating the bullish trend.

Should this trend remain the same, with Solana’s price already breaching the 0.786 Fibonacci resistance, the altcoin could mark a new high at $300.

However, if SOL drops below the 0.618 Fib level at $232.91, this prediction might be delayed again. In that case, Solana’s price might plummet to $170.82.