• Solana price falls just short of the 141.4% Fibonacci extension of the May collapse during the intra-day scramble higher.
  • SOL has climbed 47.04% over the last three days based on closing prices, marking the best three-day gain since the end of February.
  • SOL mentions on social media channels reached over 20% of the total cryptocurrency traffic on August 16.

Solana price has climbed 170% since July 21, breaking through the symmetrical triangle’s measured move of 69% and the previous all-time high of $61.44 before coming within two points of the 141.4% extension at $79.00 today. However, SOL is set to consolidate based on the extreme readings on several indicators and today’s rapid retracement. The May 18 high of $61.44 should offer some support during the corrective process.

Solana price strikes a buying frenzy

The market-leading performance for Solana price has its origins in a symmetrical triangle that developed from the May crash and triggered on July 30 with a daily close above the triangle’s descending trend line. The velocity and magnitude of the resulting advance carried the daily Relative Strength Index to the highest reading since April 2020 and SOL's deviation from the 20-day simple moving average (SMA) to 61.25%, based on the Percentage Price Oscillator (PPO).

The notable readings on a series of indicators indicate that Solana price will now pursue a correction or consolidation. For example, similar RSI readings in the past, including February 24, February 12 and August 12, 2020, coincided with short-term peaks for SOL, with the three consolidations averaging 34.93% and six days. Moreover, the last time the deviation from the 20-day SMA reached at least 50%, Solana price trended sideways for several weeks.  

If Solana price topped today at $77.26, a 34.93% pullback would take the altcoin down to $50.22, slightly above the 50% retracement of the advance from the July 20 low at $49.61, and the SOL low should be printed around Monday.

SOL/USD daily chart

SOL/USD daily chart

Solana price could ignore the stretched indicators and the bearish momentum divergence on the intra-day charts and continue the SOL surge. Points of reference are the 141.4% extension at $79.00, the 161.8% extension at $87.66 and the psychologically important $100.00.

A reflection of Solana price momentum is the dominance of SOL in cryptocurrency social media over the last couple of days. At one point yesterday, SOL accounted for over 20% of the total cryptocurrency traffic. A rare reading for any digital token, but not the highest percentage of SOL mentions in 2021. Nevertheless, it shows that the advance in Solana price had gone viral, FOMO had arrived, and a temporary high was in sight.

SOL social dominance - Santiment

The conditions for Solana price are highly fluid at the moment, with the potential for a sharp move in either direction being a strong possibility. However, the stretched indicators and the heavy social media traffic suggest that the audacious advance has ended, at least temporarily. Furthermore, historical precedent instructs SOL speculators to be aware of the potential for a 40% decline from the intra-day high.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

XRP constricts before breaking out to $1

XRP showed strong signs of recovery after the shock of this past Saturday’s flash crash wore off. The past three days of congestion after a strong rally from the lows may begin a new uptrend for XRP.

More Ripple News

Ethereum in a pennant, with bullish breakout as tailwinds reemerge

Ethereum (ETH) price has formed a pennant that quit rapidly after the big sell-off during the weekend. Between $4,646 and $4,060, the price ranges from lower highs and higher lows. 

More Ethereum News

Bitcoin needs support to hold, so that bulls can reclaim $50,000

BTC saw bulls attempting to pair back a significant piece of the occurred losses from last Saturday. But bulls have hit a curb after reclaiming $50,000, as price action fades below and tests the first real support for further downside. 

More Bitcoin News

Cardano price in phenomenal buying zone as ADA targets $3

A brief technical and on-chain analysis on Cardano price. Here, FXStreet's analysts evaluate different patterns and indicators that suggest ADA is primed to advance further.

More Cardano News

The bull and the bear case for BTC

Bitcoin price saw a recent bullish impulse that faced massive headwinds before it tagged a crucial psychological barrier. With directional bias and choppy price action, BTC is likely to experience massive volatility as the situation resolves over time. 

Read full analysis