Home / Analysis / Crypto / Technical Analysis / Solana Price Quadrupled in 2023 as SOL Nears $40 — More Room to Go or a Correction Looming?

Solana Price Quadrupled in 2023 as SOL Nears $40 — More Room to Go or a Correction Looming?

Published November 1, 2023 11:53 AM
Nikola Lazic
Published November 1, 2023 11:53 AM

Key Takeaways

  • SOL price jumped by over 400% since the start of the year.
  • Current uptrend started on September 11.
  • Chart shows early signs of overextension.

The Solana  blockchain’s native token, SOL, has experienced a remarkable rally in 2023, soaring by 400% from its initial price of $7.63, getting close to $40. Most of its price rise occurred recently, from September 11. 

This significant price movement has captured the attention of the investment community, sparking discussions on the sustainability of such growth and the potential for future gains or corrections. With some early signs of a looming correction, can it continue rising or will we see a downturn soon? 

SOL Price Analysis 

SOL started its bear market on November 6, 2021, after reaching an all-time high of $260. It then depreciated by 97%, reaching its lowest point of $7.63 made on December 31, 2021. 

Solana made a major breakout
On a parabolic rise

Throughout the year, there has been a period of consolidation within a horizontal range, with sporadic attempts to establish an uptrend, marked by higher highs and higher lows. The $30 resistance level proved formidable on July 14, causing a retreat to $17.

Remarkably, this price level held its ground, leading to a rebound and the formation of a second higher low on September 11. Subsequently, an even stronger upward momentum emerged, ultimately propelling the price to break out of its horizontal range, and its ascent became more parabolic.

Upon breaking free from the consolidation range, it reached the upper bounds of the consolidation that extended from mid-June to early November 2022, just prior to a final downward movement. Furthermore, the RSI indicator’s reading above 80% suggests signs of the price becoming overextended.

SOL Price Prediction 

Starting in January, Solana‘s price has exhibited an upward trajectory, following a five-wave pattern within an ascending channel. This can be identified as a five-wave impulse, signifying the initiation of a bullish cycle, with the most recent increase from September 11 to the present marking its fifth wave.

 

Leading diagonal count
Short term bearish count

Several aspects warrant consideration within this analysis. While the initial two waves are straightforward, waves 3 and 4 present challenges to the Elliott Wave theory. According to its guidelines, wave 3 should not be the shortest, and wave 4 should not overlap with the territory of wave 2, unless it forms a leading diagonal.

The primary question at hand is whether the presently labeled waves 3 and 4 belong to the same degree as waves 1 and 5, or if they are lower-degree sub-waves. While the chart suggests that wave 3 matches the length of wave 1 and that wave 4 enters the territory of wave 2, this interpretation appears a bit stretched.

It’s worth noting that wave 3 has a wick at its end, and wave 4 exhibits a sharp correction, rather than a flat one. Additionally, instead of a triangle, the structure resembles a channel, making the likelihood of it being a leading diagonal possible but less probable.

Bullish vs. Bearish Scenarios

In terms of our price prediction, the scenario is more bullish if we consider these waves as a lower-degree count, marked by a second higher high and a higher low.

Larger uptrend
Near term neutral count

Under this analysis, the high reached on July 14 at $31 and the subsequent low on September 11 at $18 constitute the initial two sub-waves of the higher-degree wave 3. This implies that while the price may experience brief pauses in its upward trajectory, it isn’t poised for a significant downward movement at this juncture.

Anticipation calls for another higher high in the range of $45 to $48, followed by the initiation of a higher-degree wave 4. This would likely lead to extended sideways consolidation. As this major uptrend approaches its conclusion, SOL’s price could reach $64 as the terminal point.

Crucially, it’s worth noting that there are currently no evident signs of encountering resistance, and the price continues its parabolic ascent. Therefore, in the short term, our ability to pinpoint these targets with greater precision hinges on observing where the present upward movement concludes.

But as we discussed, there are more reasons to be bullishrather than bearish on Solana according to our chart analysis.

Disclaimer

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

Was this Article helpful? Yes No