What is the reason behind SOL price breaking through $50 for the first time in 530 days?

• Solana (SOL) reached a high of $51, the apex of a 25-day parabolic rally. The $50 resistance level has not been breached since May 25, 2022.

• Weekly and daily relative strength indexes (RSI) indicate overbought conditions, but they still support continued price increases.

• Despite the optimism about the SOL price prediction, a failure to close above the $50 area on a weekly basis might halt the gains and result in a decline.

Solana (SOL) price has surged after a brief dip on Thursday. It hit a new yearly high of $51 on Friday. SOL price is currently trading within the long-term horizontal area of ​​$50. But can it continue to breakout?

Solana reaches long-term resistance level

SOL price has been rising rapidly since it broke above its long-term descending resistance trendline and confirmed it as support in September (green icon).

The rally has been strong and SOL price has not experienced any pullback. During the up move, SOL price rose above the $27 resistance area. Currently its price has risen above the $50 resistance level. Although SOL rose above this level, it has not yet reached a weekly close.

Market traders use the Relative Strength Index (RSI) as a momentum indicator to identify overbought or oversold conditions and decide whether to accumulate or sell an asset.

A reading above 50 and in an uptrend suggests that bulls still have the upper hand. A reading below 50 would suggest the opposite.

The indicator is above 50 and rising, which are signs of a bullish trend. Although the RSI is in overbought conditions (green icon), it has not yet generated any bearish divergences, which is a warning that prices are about to fall.

SOL Price Prediction: How Long Will the Rise Last?

Technical analysts use the Elliott Wave Principle to identify recurring long-term price patterns and investor psychology. This helps them determine the direction of a trend.

The daily time frame counts support for continued increase. It shows that SOL is in the third wave (white) of a five-wave upward movement. The third wave is usually the sharpest and longest of the bullish waves.

Bluntz_Capital, a cryptocurrency trader, is extremely bullish on SOL because its price has not fallen despite the continued selling by FTX. He said: "FTX has been selling 250k-700k SOL per day for the past two weeks, while the price has either gone up or sideways. So far, it has been absorbed like a champ, and at the current rate, their unlocked tokens should be exhausted within a week. Once this seller is gone, I can only imagine how difficult it will become."

The daily RSI also supports the upside as it is rising and not creating any bearish divergence.

Since the third wave length is already 1.61 times the length of the first wave, the next most likely target is the 2.61 length at $67. The target is 33% above the current price.

Despite the bullish SOL price prediction, failure to close above the $50 horizontal resistance area could trigger a 20% drop to the nearest support at $40. However, this would not invalidate the bullish count.

This can only happen if the first wave (red line) high of $32.13 is broken. In this case, SOL will fall 50% to the long-term support level of $27.