Cryptocurrency volumes have declined, with altcoins experiencing sell-offs that have painted them red for several days. The recent weekly close was disheartening, and while no one can guarantee perpetual rises in crypto, the outlook for 2024 remains intriguing, suggesting that the current downtrend might not be long-lived. The question arises: what’s next?
Elliot Wave analysis on the two-day Bitcoin chart suggests we may have reached a local peak, indicating we are in the fourth of a five-wave upward movement. This technical analysis tool is often used by analysts to predict market trends. An extended third wave, 1.61 times larger than the first, appears to have completed according to sub-wave counts.
Bitcoin’s critical region is at $41,500, and losing this horizontal support could see prices drop to $36,800, a roughly 14% retreat from current levels. This downturn could lead to 2-3 times greater losses in altcoins. A rapid closure above $49,050 is necessary to invalidate the bearish trend, while a bullish scenario targets a 22% increase to $52,000.
Solana (SOL), consistently among the most popular altcoins by volume, struggles to maintain its price above $95 after slipping below $100. Despite the decline, the ongoing growth within the Solana ecosystem and the appetite for triple-digit peaks seem to keep SOL investors from selling.
However, if Bitcoin enters a few weeks of downward movement, SOL investors may find it challenging to hold on. The coin needs to close above $97.6 to maintain its rising trend line; failure to do so could lead to a drop to $86 and potentially down to the $64-67 range, with a risk of plummeting to $45 in extreme sell-off scenarios.