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Solana (SOL): Should reach $240-260 before dropping to $130-160 again

By:
Dr. Arnout Ter Schure
Updated: Nov 3, 2021, 20:30 GMT+00:00

I always say that all I -and many analysts and trader for that matter- can do is “anticipate, monitor, and adjust if necessary.”

Solana (SOL): Should reach $240-260 before dropping to $130-160 again

A month ago, see here, when Solana (SOL) was trading at $160s, I was looking for the crypto “…to move higher into the ideal $200+/-10 target zone.” And noted, “…SOL can even rally to as high as $240 and still be in a complex 4th wave, and in that case, it will be called an irregular flat.”

Four weeks later, SOL is now trading at the mid-$220s and reached as high as $235 today. So far, so good: 30%+ upside targets achieved, which my premium crypto trading members benefit and profit from. However, how the upside target zone was achieved has me reconsider the notion of a complex Elliott Wave Principle (EWP) 4th wave as discussed in my previous updates. Allow me to explain.

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Figure 1. SOL daily and weekly candlestick charts with EWP count and technical indicators.

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As long as $180 holds, SOL can try to reach $260

In my previous updates, my line of thought was that SOL “is in a major 4th wave, with the first move … completed and thus the 2nd move … underway. Ideally, it should target $200 +/- 10 before the third move down kicks in.” SOL bottomed on September 21 at $124 after three waves down. See Figure 1A: red intermediate waves a, b, c. I then anticipated three waves back up to ideally $200+/-10. Once the target zone was reached reached and my premium crypto trading members banked on an easy +30-40% trade, it was time to re-assess my current EWP count because the correction could have been completed with three waves down, and new all-time highs are around the corner.

Namely, the current rally starts to look somewhat impulsive, i.e., a five-wave pattern as SOL has now reached the ideal (green) minor-5 target zone of $230-243, suggesting the cryptocurrency is likely about to complete (red) intermediate wave-iii. Moreover, please note the negative divergences on the daily technical indicators: red dotted arrows. Price has increased over the last few days but on less strength, momentum, and liquidity, often foreboding a pending top. Thus a wave-iii top would fit the pattern.

Besides, Figure 1B shows the weekly candlestick chart of SOL. Suppose black major-4 already bottomed in September, as it technically did enough by bottoming right inside the ideal (black) target zone. In that case, the current rally matches the ideal Fibonacci-based impulse pattern well. Namely, (red) intermediate wave-iii should ideally target the 161.80% Fib-extension of wave-i, measured from the wave-ii low, at $238.

Today’s high was $235, and the (green) minor wave-5 of the wave-iii target zone of $230-243 encompasses the ideal wave-iii target. If the Bullish thesis is correct, then SOL should soon drop to the (red) intermediate wave-iv target zone, shown in Figure 1B, at $185-200 and then rally one last time to ~$260 to complete wave-v of major-5 of Primary III. From there, I then expect a multi-month Primary-IV correction back to the $140-160 zone.

Bottom line: I always say that all I -and many analysts and trader for that matter- can do is “anticipate, monitor, and adjust if necessary.” I anticipated the rally to $190-240 last month correctly, but the way SOL has rallied to that target zone has me adjust my view in that it could very well try to target $260 first before setting up a deeper pullback down to $140-160 once again. Shorter-term, baring any wave extensions, I expect SOL to top out soon, fall back to ideally $185-200, and then rally to ~$260.

Given the potential minor-4 wave was last week’s $180 low, I, therefore, would not want to see the currency drop below that level. Because if it does, then a revisit of the September lows is once again much more likely. As such, for SOL-traders, there is now a potential downside target zone waiting with a well-defined stop loss level. Trading does, IMHO, not get much easier than that. Trade safely!

 

About the Author

Dr. Ter Schure founded Intelligent Investing, LLC where he provides detailed daily updates to individuals and private funds on the US markets, Metals & Miners, USD,and Crypto Currencies

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