Why did the price of Solana (SOL) fall below 100 dollars?

Solana's price dropped from a high of $126 on December 25, 2023. It formed bearish weekly candles for the first time since October.

Will SOL prices continue to decline this week or have they bottomed out? Let's find out!

Solana starts 2024 on a dark note.

SOL price increased after crossing the descending resistance trend line in July 2023. In September, it confirmed the same trend line as support, accelerating the upward trajectory. This rally reached $126 in December, indicating an uptrend that began in 2023.

Notably, this rise has resulted in a rise above the 0.382 Fib retracement resistance level, which includes an all-time high of total downward movement. However, the price could not break out of the long-term horizontal resistance.

Additionally, the recent decline has pushed the SOL price below the fib level, classifying the previous breakout as a divergence (red circle).

Finally, it is worth mentioning that SOL has formed a series of bearish weekly candles for the first time since October 2023. Solana prices also hit a weekly close below $100.

The Relative Strength Index (RSI) is a key momentum indicator that traders use to assess market conditions. Typically, an RSI above 50 and an upward trend indicates strong leverage, while readings below 50 indicate the opposite.

RSI gives mixed readings. While the indicator is falling and in the overbought range, it has formed a hidden bullish divergence (green).

SOL Price Prediction: Is Bottom Near?

Solana seems to be in a corrective wave on the daily technical analysis time frame.

Employing Elliott Wave theory to identify trend directions by examining long-term price patterns and investor psychology, the current wave count indicates that SOL is currently in the fourth wave of a five-wave uptrend (white).

This interpretation was reinforced by the daily RSI, which showed a bearish divergence in conjunction with the $126 high (green). In particular, in recent market activity, the price reached the 0.382 Fib retracement support level at $86 (green icon) and improved again.

Altcoin Sherpa, a cryptocurrency trader, noted this rebound, but suggested that the price could fall to the 0.5 Fib retracement support level at $72. However, many other analysts believe Solana's price will continue to fall below $100.

Typically, wave four often takes the form of a symmetrical triangle. Therefore, it is reasonable to reach the bottom of the correction level, and the value of SOL can be summed up in the triangle before it disappears.

If this scenario is observed, the possible target of SOL's upward movement is estimated at $180, which is a 90% increase from the current price.

Despite this huge SOL price prediction, the breakout view will be rejected if the price breaks the triangle. Then a 25% decline to the 0.5 Fib retracement support level at $72 could occur.

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