After reaching a local top around $165, Solana has entered into a well-defined downtrend. Based on our wave count, the market is currently undergoing a classic ABC correction. The structure of this correction appears to be well-formed, and when we examine the broader market structure, it could be interpreted as nearing completion.
Key Observations:
- ABC Correction: The chart illustrates a textbook ABC corrective pattern, with the price recently completing the C-wave. This final wave typically signifies the end of the correction phase, potentially setting the stage for the next upward move. The C-wave appears to have ended around the $130-$137 support zone, aligning with key Fibonacci levels.
- Fibonacci Levels: The chart highlights important Fibonacci retracement levels that have been respected during this correction:
- 0.618 retracement at $143.37
- 0.5 retracement at $137.05
- 0.382 retracement at $130.73
- Downtrend Structure: The downtrend from the $165 local top has been orderly, with clear wave structures that align with the Elliott Wave theory. This suggests that the market is behaving in a predictable manner, following the typical phases of a correction after a strong bullish impulse.
Conclusion:
Solana appears to be completing a well-formed ABC correction after reaching a local top at $165. The correction has respected key Fibonacci levels, and the market structure suggests that the corrective phase could be nearing its end. If this interpretation is correct, Solana might be preparing for a new upward movement following this correction. Traders should watch the support levels closely for signs of a reversal or continued weakness.
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