Solana (SOL) Price Moves Above $50 for First Time in 530 Days – What’s Behind It?

The Solana (SOL) price increased sharply after a temporary drop on Thursday. It reached a new yearly high of $51 on Friday. 

The SOL price now trades inside the long-term $50 horizontal area. But can it break out above it?

Solana Reaches Long-Term Resistance

The SOL price has increased swiftly since breaking out from a long-term descending resistance trend line and validating it as support in September (green icon).

The rally has been sharp, and the SOL price has not experienced any retracement. During the upward movement, the SOL price increased above the $27 resistance area. It is now increasing above the $50 resistance area. While SOL moved above it, it has yet to reach its weekly close.

SOL/USDT Weekly Chart. Source: TradingView

Market traders use the Relative Strength Index (RSI) as a momentum indicator to identify overbought or oversold conditions and to decide whether to accumulate or sell an asset.

Readings above 50 and an upward trend indicate that bulls still have an advantage. Readings below 50 suggest the opposite.

The indicator is above 50 and increasing, both signs of a bullish trend. Even though the RSI is overbought (green icon), it has not generated any bearish divergence yet, a warning of an impending price decrease.

Read More: 9 Best AI Crypto Trading Bots to Maximize Your Profits

SOL Price Prediction: How Long Will Increase Continue?

Technical analysts employ the Elliott Wave theory to identify recurring long-term price patterns and investor psychology. This helps them determine the direction of a trend.

The daily time frame count supports the continuing increase. It suggests that SOL is in wave three of a five-wave upward movement (white). Wave three is often the sharpest and longest out of the bullish waves. 

Cryptocurrency trader Bluntz_Capital has an extremely bullish view on SOL, since the price has not fallen despite consistent selling by FTX. He stated:

FTX has been selling between 250k-700k SOL every day for the last two weeks while price has either been going up or sideways. so far its been getting absorbed like a champ and at current rate their unlocked tokens should be depleted within a week. once this seller is gone I can only imagine how hard its gonna pump.

The daily RSI also supports the increase, since it is increasing and has not generated any bearish divergence.

Read more: What Is Solana (SOL)?

Since wave three already has 1.61 times the length of wave one, the next most likely target is the 2.61 length at $67. The target is 33% above the current price.

SOL/USDT Daily Chart.
SOL/USDT Daily Chart. Source: TradingView

Despite this bullish SOL price prediction, failure to close above the $50 horizontal resistance area can trigger a 20% drop to the closest support at $40. However, this would not invalidate the bullish count.

That would only happen with a decrease below the wave one (red line) high of $32.13. In that case, SOL will decrease by 50% to the long-term support at $27.

For BeInCrypto’s latest crypto market analysis, click here.

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