Solana (SOL) Attempts To Break Out Above $2.50 Resistance
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Solana (SOL) has reclaimed the $1.35 support area after initially deviating below it. It’s currently making an attempt at breaking out above $2.50.
Technical indicators and the wave count support the possibility of a breakout that could eventually lead Solana to a high near $5.
Solana Bounces Above Support
The SOL price has been decreasing since Sept. 1 after reaching a high of $5.10. The downward move continued until a low of $1.22 was reached on Nov. 5. The low served to validate the $1.35 area as support and was the catalyst for an upward move towards the $2.50 resistance area.
However, SOL was rejected and began another downward move that led to a deviation and a retest of the $1.35 area. Currently, SOL is in the process of making another attempt at breaking out above $2.50.
If successful, the next resistance area would be found at $3.55 (0.618 Fib retracement level) and $5.10 — the top of the same move.
Technical indicators are bullish and support the possibility that SOL will break out.
Cryptocurrency trader @CryptoNewton outlined a SOL chart, stating that it is likely to increase all the way to $5.
While there is a significant resistance area at $3.50 as outlined above, SOL is likely to increase to $5 if it manages to clear resistance.
Short-Term SOL Movement
The two-hour chart shows that SOL has been following an ascending support line since Dec. 24. Furthermore, SOL has broken out from a descending resistance line (dashed) and validated it as support after.
These are both bullish signs, suggesting that SOL is likely to continue increasing.
Similar to the daily time-frame, technical indicators are bullish and support the continuation of the upward movement.
The wave count suggests that SOL is in wave 5 of a bullish impulse, which has a target between $3.02-$3.07. The target is found by using a Fib extension on wave 1 (black) and an external retracement on wave 5 (white).
The target between $3.02-$3.07 is also the 0.5 Fib retracement level of the entire downward move, making it likely to act as a top.
Conclusion
Solana (SOL) is expected to break out above the $2.50 resistance area and increase toward the range of $3 and $5.
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