Solana’s 21% Price Drop Makes It Top 10’s Worst Performer: What’s Next for SOL?

Key Takeaways

• Solana dropped 21%, from $140 to $110 on Aug. 5.
• The RSI indicates SOL is oversold, suggesting a potential bounce.
• Expect consolidation before possible price reversal.

Solana’s (SOL) price has been ravaged by the latest market downturn, plummeting 21% in a single day to reach a low of $110.

The drop has made SOL the hardest-hit cryptocurrency among the top 10, with its value tumbling to levels last seen in February. However, despite the bleak outlook, subtle signs of a potential reversal are beginning to emerge, leaving investors wondering if Solana’s fortunes are about to change.

SOL Price Analysis 

After an uptrend that led to a breakout above the descending resistance level on July 20, we anticipated a potential retracement. Had SOL bounced and retested the broken resistance for support, this move would have confirmed a bullish trend.

However, in previous analyses, we also noted that SOL could face further downsides if the breakout level fails to hold. This would suggest that the corrective structure from mid-March is still ongoing, implying one more downward move.

With SOL  falling to a lower low compared to its horizontal support of around $120, the bearish case materialized. The daily chart’s RSI is now at an oversold level of 27%, values last seen on April 13, reflecting a similar market environment.

Currently, there are no clear signs of a reversal. However, given the decline and the SOL level, we can expect a period of consolidation before a reversal occurs. The downtrend from July 22 marks the fifth wave since mid-March, ending in a complex WXYXZ correction. This complexity is another reason why a reversal could be on the horizon.

SOL Price Prediction 

Zooming into the hourly chart and examining the wave structure behind the latest downtrend, we can also see that this three-wave pattern has developed fully, with its last downward advancement counting a five-wave move. 

Although it is still searching for support, the momentum is diminishing, as suggested by the hourly chart MACD, which shows an uptrend on the oscillator bars. There is a case to be made for another lower low before this reversal comes. Even in that case, however, SOL should consolidate and recover slightly. 

Our next likely target is around $140. The interaction with that area, and what happens after that will provide further clues at the next likely outlook. 

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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