SOL price breaks $50 for the first time in 530 days. What is the reason behind it?

SOL price reaches a 530 day high of $50. What is driving this increase?

Author: Valdrin Tahiri, translated by: Shan Ouba, LianGuai

• Solana (SOL) reached a high point of $51, which is the peak of a 25-day parabolic rebound. The $50 resistance level has not been broken since May 25, 2022.

• The relative strength index (RSI) on the weekly and daily charts shows overbought conditions, but they still support further price increases.

• Although optimistic about SOL price predictions, if the closing price fails to rise above the $50 area within a week, it may prevent further increases and lead to a decline.

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Solana (SOL) price surged significantly after a brief decline on Thursday. It reached a yearly high of $51 on Friday. The SOL price is currently trading within the $50 long-term level range. But can it continue to break through?

Solana reaches long-term resistance level

Since the SOL price broke through the long-term downward resistance trendline and confirmed it as a support level (green icon) in September, the SOL price has been rising rapidly.

The rebound is strong, and the SOL price has not experienced any retracement. During the upward movement, the SOL price rose above the $27 resistance area. Currently, its price has risen above the $50 resistance level. Although SOL has risen above this level, it has not yet reached the weekly closing price.

Market traders use the relative strength index (RSI) as a momentum indicator to identify overbought or oversold conditions and determine whether to accumulate or sell assets.

A reading above 50 and trending upward indicates that the bulls still have the advantage. A reading below 50 indicates the opposite.

The indicator is above 50 and rising continuously, which are signs of a bullish trend. Although the RSI is in overbought territory (green icon), there has been no bearish divergence, which is a warning of an upcoming price decline.

SOL price prediction: How long will the uptrend continue?

Technical analysts use Elliott Wave Theory to identify recurring long-term price patterns and investor psychology. This helps them determine the direction of the trend.

The daily timeframe count supports continued upward movement. It indicates that SOL is in the third wave (white) of a five-wave upward movement. The third wave is typically the sharpest and longest in a bullish wave.

Cryptocurrency trader Bluntz_Capital has an extremely optimistic view of SOL because, despite continuous selling by FTX, its price has not dropped. He says: Over the past two weeks, FTX has been selling 250k-700k SOL every day, and the price has either risen or consolidated. So far, it has been absorbed like a champion, and at the current pace, their unlocked tokens should be exhausted within a week. Once this seller is gone, I can only imagine how difficult it will become.

RSI is also supporting an upward trend, as it is rising and has not produced any bearish divergences.

Since the length of the third wave is already 1.61 times the length of the first wave, the next most likely target is a length of 2.61, which amounts to $67. This target is 33% higher than the current price.

While SOL price predictions are bullish, failing to close above the $50 level of resistance could trigger a 20% drop to the nearest support level at $40. However, this would not invalidate the bullish count.

This scenario would only occur if the first wave (red line) high of $32.13 is broken. In this case, SOL would fall 50% to a long-term support level of $27.

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