Solana just cracked the top ten biggest cryptocurrencies with a market cap of just under $21 billion. The rumored Ethereum rival is up 235% in the past month alone after a steep ascent from $22.11 to as high as $75 so far today. Does this mean it is time to join the bulls and invest your hard-earned dollars into Solana? After seeing the Elliott Wave chart below, we remain skeptical.
Solana ‘s daily logarithmic chart reveals a five-wave impulse, whose fifth and final wave is now unfolding. The pattern is labeled (1)-(2)-(3)-(4)-(5), where the five sub-waves of wave (3) are visible, as well. Wave (2) was a sharp retracement from nearly $5 to barely above $1. Wave (4), on the other hand, was a sideways triangle correction, marked a-b-c-d-e.
This, in turn, means the recent surge to new records must be wave (5). Unfortunately for the bulls, the theory states that a three-wave correction follows every impulse. If the count above is correct, we can expect a notable bearish reversal once wave (5) is over. Of course, calling the top is outside the scope of this article. Solana might actually reach the $100 mark before the bears return.
The point is that corrections usually erase the entire fifth wave. Here, this translates into a decline back to the support of wave (4) near $20 or lower. In our opinion, the risk/reward ratio is not at all attractive and we’d rather observe Solana from a safe distance.
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