Solana Hits Yearly High at $64: Analyzing the Sustainability of the Rally

Solana (SOL) has reached a yearly high of $64, continuing its parabolic surge that began in early October. Analyzing the recent price movements and technical indicators provides insights into the potential duration of this upward momentum.

On the weekly chart, SOL has experienced significant growth since breaking a long-term descending resistance line in September, confirming it as support (green marker). The token swiftly surpassed resistance levels at $27 and $50.

Last week, Solana closed above $50 for the first time since May 2022, establishing a yearly high at $64. The Relative Strength Index (RSI) on the weekly chart has risen above the neutral mark of 50, indicating a bullish trend. Although the RSI is in overbought territory, it has not formed bearish divergence, and its current value of 82 is well below the historical maximum of 99.

Recent reports from Lookonchain revealed that an account associated with FTX withdrew SOL tokens worth $13.6 million to the Kraken exchange, with most of the assets being sold. Currently, only 3408 Solana remains in public addresses associated with the notorious crypto exchange.

SOL Forecast: Predicting the Local Peak According to Elliott Wave Theory, Solana is in the third wave of a five-wave bullish structure, which is typically the most robust and lengthy. The length of this wave is approaching 2.61 times the length of the first wave, serving as a potential target for the formation of a peak.

Cryptocurrency trader BluntzCapital also utilized Elliott Wave Theory to predict a short-term bottom and rebound. The daily RSI confirms the upward trend, consistently rising without signaling bearish divergence.

The Solana forecast will likely be influenced by the price’s behavior around the $67 resistance level. In the case of a bullish breakout, SOL could see a further 35% increase, reaching $86. Conversely, in the event of a pullback, the price may correct by 20%, touching the $50 support area, completing the fourth wave.

It’s essential to note that a drop to $50 does not invalidate the bullish trend. On the contrary, it could be considered a healthy correction.

Meanwhile, cryptocurrency trader CryptoPoseidonn, using a fractal, predicted a gradual decline of Solana to $20 followed by a resumption of growth. According to wave calculations, a bearish trend would only be recognized if the price drops below the first wave’s maximum (red line) at $32, potentially leading to a 60% decline to the next support at $27.