Our regular readers probably know that we’re not big fans of cryptocurrencies. We like to trade and invest in things whose prices have at least some vague connection to fundamental intrinsic value. The problem is that crypto experts are divided over the real worth of even the biggest, oldest and most well-known cryptocurrency out there – Bitcoin. Some say its price should rise into the millions, while others argue that it’s actually worthless. So we think that the true value of all the other tokens is even less certain, if that’s even possible.
When a clear bullish Elliott Wave setup emerges, however, objective analysis dictates that we follow it wherever it leads. This seems to be the case right now with Solana. The fifth biggest crypto, with a market cap of just over $75B, has risen 20-fold from its late-2022 bottom at $8 to over $160. The structure of this ascent, visible on the chart below, suggests that the bulls have more room to run.
The recovery from $8 to $210 in March, 2024, can be seen as the first three waves of a five-wave impulse, marked (1)-(2)-(3)-(4)-(5). Wave (3) is much larger than wave (1) and its five sub-waves are also visible. The following drop to $110 by early-August is a clear A-B-C zigzag correction in what should be wave (4). If this count is correct, wave (5) can be expected to lift the price of Solana above the top of wave (3) at $210. In fact, upside targets near $250 make sense, as well.
Unfortunately for the bulls, no trend lasts forever. Once wave (5) is over, the entire impulse pattern from the bottom at $8 would also be complete. According to the Elliott Wave theory, a three-wave correction follows every impulse. So instead of opening fresh long positions near $250, crypto traders and investors should recognize that this bull market is far from young. The upcoming retracement can easily drag Solana back to the support of wave (4) near $110 or even lower.