Solana slid further from 2023 highs this week after breaking down from a horizontal support zone. The token sits around $87 following a 7% weekly drop that has analysts debating whether a relief rally or continued descent comes next.
SOL touched the $126 mark in late December to complete a powerful month-long advance off mid-2022 lows. But it met seller congestion at Fibonacci resistance that sparked the sharp pullback still underway.
Repeated failures to reclaim former support-turned-resistance around $90 have some chartists cautious about near-term traction. However, others see technical patterns playing out that precede stronger rallies.
Popular pseudonymous analyst Altcoin Sherpa believes SOL will eventually ramp higher but advocates patience until conditions improve. He and other experts eye the $72 area representing the 0.5 Fib as plausible support for a trend reversal.
— Altcoin Sherpa (@AltcoinSherpa) January 24, 2024
Sherpa suggests dollar cost averaging Solana
“I think that dollar costs averaging in at 0.382 and 0.50 are both good options for long-term holds for Solana,” Sherpa tweeted this week. “Not expecting things to ramp up quite yet, but just be patient.”
The wave count suggests SOL is traversing the fourth wave of a five-wave advance that would bottom around current levels. A decisive move back above $90 resistance is viewed as necessary to confirm sellers have exhausted momentum for now.
From there, a 40% SOL surge back toward the recent swing high becomes theoretically on the table. But analysts urge caution around overeager long entries before confirming signals of a durable low.
In the eyes of crypto chartists, SOL remains in correction mode following its stellar Q4 performance. But fundamental catalysts and a high-timeframe base could make the token springboard higher once macro gales abate.