The Solana (SOL) price reached a new yearly high of $64 last week and is attempting to break out again.
SOL has increased parabolically since the start of October. How long will this increase continue?
Solana (SOL) Closes Above $50 Resistance
The SOL price has surged significantly since breaking a long-term descending resistance trend line and confirming it as support in September (green icon).
This upward movement has been rapid, with no noticeable pullback. SOL surpassed the $27 and $50 resistance areas during the ascent.
Last week’s close of $56 was the first above $50 since May 2022. The SOL price also reached a new yearly high of $64 last week.
Traders commonly use the Relative Strength Index (RSI) to gauge momentum, identifying potential buying or selling opportunities based on overbought or oversold conditions.
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An RSI above 50 and an upward trend suggest a favorable scenario for bulls, while readings below 50 imply the opposite.
The RSI is above 50 and rising, indicating a bullish trend. Despite the RSI being in overbought territory, there’s no bearish divergence yet, signaling a potential price decline. Also, the current RSI value of 82 is well below the all-time high of 99.
SOL/USDT Weekly Chart. Source: TradingView
On Tuesday, Lookonchain tweeted that the FTX account deposited $13.6 million worth of SOL to the Kraken exchange. The FTX address has sold most of its holdings, leaving only 3,408 SOL that could provide sell pressure in the future.
SOL Price Prediction: When Will Price Reach a Local Top?
Technical analysts use the Elliott Wave Theory to identify recurring long-term price patterns and understand investor psychology, aiding in trend direction determination.
On the daily time frame, the Solana price appears to be in the third wave of a five-wave upward movement, which is typically the sharpest and longest among bullish waves. Wave three is nearing 2.61 times the length of wave one, a likely level for a top.
Cryptocurrency trader BluntzCapital also used the Elliott Wave Theory to predict the short-term bottom and ongoing bounce.
Read more: What Is Solana (SOL)?
The daily RSI reinforces the upward trend, increasing without any bearish divergence.
On the other hand, if the SOL price gets rejected, it can correct by 20% and reach the $50 support area, completing wave four.
Notably, the decrease to the $50 area will not invalidate the bullish trend.
SOL/USDT Daily Chart. Source: TradingView
Cryptocurrency trader CryptoPoseidonn has used a fractal to predict that the SOL price will fall gradually toward $20 before eventually resuming its increase.
According to Elliott Wave theory, the bullish trend will only be invalidated with a decrease below the wave one high (red line) at $32. That could cause a 60% price decrease to the next support at $27.
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