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Solana Recovery Wave Building: Will It Break Out Of The Channel?
TL;DR
Solana (SOL) shows signs of recovery as it stabilizes within a defined channel after a recent pullback. With easing selling pressure and potential for a corrective upswing, a breakout above the channel could confirm this recovery.
Key points
- Solana is stabilizing within a defined channel.
- Easing selling pressure indicates potential recovery.
- A breakout above the channel could confirm recovery.
Solana (SOL) is showing early signs of recovery as price action begins to stabilize within a defined channel following its recent pullback. With selling pressure easing and buyers gradually stepping in, momentum appears to be shifting toward a potential corrective upswing.
Corrective Recovery Scenario Takes Shape
Presenting a wave outlook for Solana on the 1-hour timeframe, Elliott Waves Academy highlights a potential shift in short-term structure. Momentum appears to be cooling on the downside, opening the door for a corrective phase that could reshape the near-term trend.
One of the more probable scenarios suggests a recovery unfolding through a corrective wave, potentially identified as wave (2)/(B). Such a move may develop into a double zigzag structure, a pattern often seen when the market attempts a deeper retracement with buyers gradually stepping back into the market.
A decisive breakout above the upper boundary of the current diagonal pattern would provide early confirmation of this recovery setup. Strength would be further reinforced if price manages to clear the key level associated with the previous bearish wave, signaling that selling pressure is weakening.
Source: Chart from Elliott Waves Academy on X
From a Fibonacci perspective, the anticipated recovery zone lies between the 50% and 61.8% retracement levels of the prior downward move. These levels often act as magnets during corrective phases, with the potential for an extended push toward the 78.6% retracement if bullish momentum builds.
For a broader bearish wave to occur, this retracement region must act as a strong resistance zone where sellers regain control. A noticeable increase in selling pressure here could trigger the next leg of the decline. However, if Solana begins to form impulsive waves while maintaining a pattern of higher lows, without revisiting the previous bottom, it would increase the likelihood of a more sustained upside move beyond the corrective phase.
Q&A
What is the current price action trend for Solana (SOL)?
Solana is currently stabilizing within a defined channel, indicating early signs of recovery after a recent pullback.
What does a breakout above Solana's channel signify?
A breakout above the upper boundary of the channel would confirm a potential recovery setup, indicating weakening selling pressure.
What is the significance of the corrective wave scenario for Solana?
The corrective wave scenario suggests that Solana may undergo a deeper retracement, potentially reshaping its near-term trend as buyers re-enter the market.
