Solana (SOL) Elliott Wave Analysis: Bullish Outlook

We maintain a bullish stance on Solana (SOL), alongside Ethereum, as our top picks for the coming months. Solana has shown remarkable resilience, closely tracking Bitcoin’s movements while outperforming other altcoins. This behavior reinforces its strength as a high-potential asset in the current market cycle.

Elliott Wave Structure Overview

Based on our Elliott Wave analysis, Solana appears to be in Wave 1 of the larger Wave 3 in the grand cycle. Wave 3 is typically the most impulsive and powerful wave, often extending in both price and time. If this projection holds true, Wave 1 of 3 is expected to propel Solana toward the $400 level.

Current Market Position

Zooming in on the current wave structure:

  1. Wave 1 (of 3) is unfolding and nearing its local completion, marked by resistance near $240.
  2. We anticipate a corrective pullback, which would likely form Wave 4 (of 1). Corrections within Wave 4 are commonly light, following Flat pattern.
  3. Fibonacci retracement levels suggest a strong support zone in the range of $195–$200, corresponding to the 0.382–0.5 retracement levels of Wave 1.

Key Fibonacci Levels

  • 0.236 Level: ~$226 (current price region, initial support)
  • 0.382 Level: ~$195 (next critical level)
  • 0.5 Level: ~$179 (deep retracement but still bullish)

These levels are crucial for determining the end of the Wave 4 correction, which would set the stage for the explosive Wave 5 of 1.

Indicators Supporting the Analysis

  • RSI Divergence: While RSI is cooling off from overbought levels, this is typical during a corrective Wave 2, allowing momentum to reset for the next impulsive leg.
  • Trend Channels: Solana remains firmly within the ascending channel, with its lower boundary aligning with the $195-$200 region.

Mid-to-Long-Term Projections

After completing the current correction, we expect:

  1. Wave 3 (of 3) to extend well beyond $400, potentially targeting Fibonacci extension levels such as $500-$600.
  2. Subsequent smaller corrections (Waves 4 and 5) will shape the completion of the larger Wave 3, potentially pushing Solana to new highs.