Thorough predictive research suggests that Solana will need to first move lower before breaking out to new highs. This process will create bullish reversal; it is a pre-requisite for a Solana breakout to occur. While new highs are likely for SOL, it is unlikely for this to happen in the short term.
In our Solana predictions for 2024 & 2025 we write, in great detail, about our Solana predictions:
InvestingHaven’s proprietary SOL forecast 2024 is based on Solana’s bullish cup and handle pattern. SOL should drop to support at $82.84 which, if hit, we predict will offer an epic buy opportunity. If this support holds, InvestingHaven’s SOL forecast 2025 suggests bullish targets in the $500 – $1,000 area.
What we did not do, however, is explain in detail which factors matter for a SOL breakout to new ATH.
Understanding when Solana (SOL) might break out involves closely monitoring several key factors.
Analyzing these data points allows anyone to better predict the timing and likelihood of Solana reaching new heights.
SOL to new ATH? Educational video about forecasting.
That’s why we recorded an educational video about SOL forecasting, explaining what exactly will matter for SOL to break out to new ATH. InvestingHaven’s lead analyst recorded this video which takes a structural and easy to understand approach to forecast Solana.
RELATED – 7 Things To Note About Solana The Next 18 Months
1. A Solana breakout requires Bitcoin’s secular uptrend to remain intact
Solana’s breakout heavily depends on Bitcoin’s momentum.
As noted:
For Solana to move higher, Bitcoin needs to continue its upward trend.
Bitcoin’s performance acts as a barometer for the entire crypto market.
When Bitcoin exhibits a long-term uptrend, represented by its rising channel on weekly charts, it creates a conducive environment for Solana to follow suit.
Below is the weekly BTC chart. As seen, the long term channel is perfect. Solana requires BTC to continue moving within this long term channel; an uptrend continuation in BTC will determine if and when a Solana breakout will occur.
2. Market dynamics: Bi-furcation in crypto markets
The current bifurcated state of the crypto market plays a significant role.
We are in a bifurcated crypto market where not all tokens participate in the upside.
While Solana has performed well, a necessary pullback could set the stage for a robust breakout. The key is for Solana to reset while maintaining its strong fundamentals and favorable chart patterns.
At InvestingHaven, we forecasted that the 2024 bull market would be highly bi-furcated. This implies that many tokens do not rise amid strength in BTC. This feels awkward, as a market participant, but it’s the new normal.
For Solana to continue to do well, amid bi-furcated crypto markets, it should foster its great fundamentals and continue to move in a long term bullish chart reversal.
RELATED – The Crypto Bull Market 2024 Is An Hidden Bull Market.
3. Solana’s bullish reversal pattern
One critical chart structure to watch for is a bullish reversal.
For a positive outcome, Solana’s chart structure should show a bullish reversal.
This reversal pattern, similar to the one between 2022 and 2024, indicates potential for upward momentum. Specifically, a smaller rounded pattern forming a cup and handle structure would be a strong bullish signal.
Below is the bullish reversal that SOL created in the last 36 months. It is easy to see a much smaller reversal to take place, creating a cup and handle formation.
4. Key support determined by one important weekly candle
Solana’s ability to hold specific support levels is crucial.
The critical level to watch is around $80-$85.
If Solana drops to this level and holds, it could set up a bullish reversal and a strong base for future gains. This support must be maintained for several weeks to validate its significance and signal a potential breakout.
This is the SOL chart that holds the key to a Solana breakout in the future – the weekly candle depicted on the chart must be respected, at all times!
5. Periods of uncertainty – Sept/Oct of 2024?
Before a breakout, Solana might enter a “Twilight Zone” period of uncertainty.
If Solana respects the key support level, we may enter a ‘Twilight Zone’ period of uncertainty, characterized by a battle between bulls and bears.
This phase, marked by market indecision, is crucial for establishing a new bullish trend. Patience is key during this volatile period.
The “Twilight Zone” is a period when most investors hate a market. It’s the opposite effect of a rising trend that results in passion for markets. The “Twilight Zone” for SOL is likely going to happen when SOL retraces, which is likely going to happen in the period Sept/Oct 2024.
6. Ripple vs. SEC matters also to Solana
The legal battle between Ripple and the SEC also impacts Solana’s breakout potential.
If Ripple wins against the SEC, it would be favorable for Solana, reducing regulatory risks.
Conversely, an SEC victory could pose challenges for Solana. Monitoring this case is essential, as its outcome will influence Solana’s regulatory environment and market confidence.
Remember, the SEC sued Solana, saying it is an unregistered security. Solana wants Ripple to win the case, to set a precedent, supporting the case that SOL is not a security.
7. Solana breakout: Validation and invalidation
To anticipate a breakout, certain validation points must be met:
- Solana must stay above $30.
- Bitcoin should remain in its long-term rising channel, staying above $30,000.
- The SEC should lose its case against Ripple.
Meeting these conditions will create a strong foundation for Solana’s breakout. Conversely, violating these points could delay or negate the breakout potential.
As with any forecast, there must be invalidation criteria, no matter how unlikely it is that they will be met.
In the case of SOL, it is of course very unlikely that it will drop again to $30. Similarly, BTC dropping below $30k, amid growing institutional interest, is an unlikely outcome.
Conclusion: Solana breakout?
In conclusion, predicting when Solana will break out involves monitoring Bitcoin’s momentum, understanding the bifurcated market, watching for bullish reversal patterns, and keeping an eye on key support levels.
From a regulatory perspective, Solana would need Ripple to win the case against the SEC.
In closing, no matter how unlikely it is that BTC will drop below $30k, it remains mandatory to consider invalidation criteria. We firmly believe that THE most important factor for a Solana breakout to occur is the uptrend continuation of Bitcoin within its long term rising channel.
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