Hello and welcome to another update on Solana! Today, we’ll delve into Solana’s recent price action, focusing on its reaction to the B-wave support zone and the potential for a breakout. Let’s start with a big-picture view before diving into the details.
Big Picture Overview
Firstly, it's crucial to understand that Solana is moving within a larger range. For many months, I've mentioned that Solana is likely in wave four. Wave fours are typically sideways corrections – they can be quite boring, choppy, and prone to fake-outs. Understanding this in advance helps us prepare mentally for such a structure.
Sideways Range and Key Levels
Solana has been trading within a well-defined range, between $119 and $190. As long as the price remains within these boundaries, the overall structure doesn’t change. Any price action within this range is considered noise without clear direction, just corrective movements up and down.
Wave Four Triangle
We can consider wave four as a triangle pattern, which consists of five waves (ABCDE) according to Elliott Wave principles:
- Wave A: Bottomed around April 13-14.
- Wave B: Topped on May 21.
- Wave C: Turned around where expected.
- Wave D: Could be in progress.
- Wave E: Anticipated as a higher low.
Triangles can morph into different structures, so this ABCDE structure might transform into a larger wave four ABC structure. A break below $119 would confirm this change, invalidating the triangle pattern.
Detailed Wave Count
Recent Price Action
After completing the C-wave, Solana had a breakout to the upside, pulling back into the lower support zone. The move down looked somewhat like a five-wave decline, indicating that a B-wave might still be unfolding.
Circle Wave D
Assuming we're in circle wave D of the triangle, which is an ABC structure:
- Wave A: Could be complete.
- Wave B: Might be unfolding or completed.
- Wave C: Expected next.
Short-Term Outlook
The key question is whether the market will test the support zone again. The base case is that we're in wave D and should see an upward move in wave C of D soon.
Critical Support Levels
To maintain the perspective of being in wave D, Solana needs to hold above $128.144. As long as this level holds, we can expect a move to the upside.
Potential Scenarios
Five-Wave Move Confirmation
We need to see a five-wave move-up followed by a three-wave pullback to confirm that wave C to the upside has started. This would form wave 1, and a subsequent higher low would form wave 2, setting up for waves 3, 4, and 5.
Resistance Area
If Solana gets rejected in the resistance area between $145.56 and $147.96 and comes down, this might complete wave C. However, I'm open to the idea of forming a five-wave move-up.
Target Ranges
If we move higher, the target range for wave D is between $163.188 and $176. Additionally, the 100% extension level, assuming the last low holds, is around $169. This aligns with our target range.
Conclusion
To sum up, Solana is navigating a complex wave four structure. We're watching key support levels to confirm the next move. The primary focus is on maintaining above $128.144 to stay on track for an upward move in wave C of D.
Thank you for joining us for this Solana update. Stay tuned for more insights and analysis, and make sure to follow us for the latest updates.