Hello and welcome to another update on Solana! Let's dive into the latest market movements and my current analysis.
Current Market Movement
Solana continues to move in a seemingly endless sideways range. My current idea is that we are in an Elliott Wave triangle, although this might change. This idea will only be invalidated if we break below $119 or above $190.
At the moment, it seems we are in a triangle, typically a five-wave move consisting of five corrective structures: A, B, C, D, and E.
The current movement suggests we are progressing in a D-wave within this triangle. The D-wave is a corrective structure, and its critical requirement is not breaking below the C-wave low. The invalidation point for the D-wave to the upside is $122.60.
Key Fibonacci Support Zone
I've added a Fibonacci support zone relevant to the latest microstructure, defined between $128 and $139.46. If we are indeed in an A-B with a C-wave possibly to come in wave D, the B-wave should ideally finish in this region.
Target Levels and Structure Analysis
About half an hour ago, I updated Gold members and highlighted the 100% extension level for this microstructure.
If the D-wave is a three-wave move (an A-B-C structure), the key target for the C-wave is the 100% extension level, around $141. We've pretty much reached this already, so we might see a bounce or a turnaround from here.
Unfortunately, the current decline's structure doesn't show a clear five-wave move in this C-wave to the downside.
Being an altcoin, the microstructure is fragile and can change rapidly. You might want to use a trendline as an initial breakout signal, although it is pretty steep. Many touchpoints suggest it could be useful.
Potential Scenarios
Most likely, we are seeing a C-wave down in wave B, which could extend a little lower to $128 without invalidating the current idea. This area between $128 and $139 is where the B-wave should finish.
If we break above the trendline, it might signal the start of the C-wave rally. The C-wave to the upside should be a five-wave move, so we would want to see at least a one-two setup to confirm this unfolding.
Invalidation Points and Further Analysis
The overall invalidation point for the D-wave idea is the C-wave low. Below $128, the probabilities start to shift towards a more bearish outlook.
The proposed microstructure still allows for further upside in the short to medium term, but first, we need to complete the B-wave correction.
Additional Support Levels
There is additional support at $136 and $132.75, which are relevant to Fibonacci levels. The Volume Weighted Price (VVP) historical volume also shows plenty of support around $137 down to $134. This suggests a strong support area between the 50% and 61.8% retracements.
Conclusion
That's the latest update on Solana. Keep an eye on the support and resistance levels mentioned, and be cautious of potential invalidation points. As always, the cryptocurrency market is volatile, and rapid changes can occur.