- Solana has rallied in February to set a monthly high of $119, but it has dipped since, and using the Elliot Wave Theory shows that SOL is in the fifth and final upward wave.
- Analysts believe that a correction as high as 20% is coming, but they advise investors to hold on to their bags as the retracement will be shortlived and SOL will regain its upward momentum.
Solana has been one of the best-performing large-cap cryptocurrencies this year, shooting up since late January to set a new 2024 high days ago. It has retraced slightly to trade just below $110 today, with analysts warning that it could get rocky for SOL in the weeks ahead before the crypto gets back on its upward trajectory.
Solana was one of last year’s bull market stars, shooting from $24 in mid-October to set a new 18-month high in late December at over $121. However, it had a rocky start to the year, bottoming out at $79 on Jan. 23. Since then, the token has been on an uptrend and has retested its December highs, albeit unsuccessfully.
At press time, SOL trades at $ 109.60, losing 2.5% in the past day to cap off an unremarkable week. However, the token is still up 19.60% in the past month.
Analysts almost unanimously believe Solana still has heights to scale this year, and it could retest its all-time high of $259, which it hit in November 2021. However, in the short term, the crypto could first shed some of the gains, with some saying the drop will be as high as 20%.
Altcoin Sherpa told his 208,000 followers:
It’s a bizarre chart seeing this grind up slowly. I expect some sort of selling to happen around the highs, given the length of time spent between each peak, but the entire market is still up only right now. I think that expecting any huge correction for Solana is meh for now.
He added:
Bullish on this one big going into 2024, and I think most would make more [money]just buying here and sitting on this thing for months instead of trying to wait for the 20% correction.
What’s Next for Solana (SOL)?
On the technical front, all signals indicate an impending dip for SOL in the near future. Its relative strength index is close to 70, indicating that the crypto is moving towards the ‘overbought’ category.
Further, applying Elliot’s wave theory suggests that SOL could be on its final wave. This theory identifies recurring long-term price patterns, usually derived from prevailing investor psychology, and helps analysts identify and predict the direction of a trend in the asset’s price.
Meanwhile, other network metrics remain bullish—the total value locked (TVL), for instance, is the fifth highest at $2.05 billion. In the past month, it has increased 27%, the second highest rise after Bitcoin for any crypto with over $1 billion in locked assets.
