Solana has experienced a remarkable surge in early May, breaking out from a consolidation phase and climbing to a local high of $179.92. However, the digital asset has since pulled back and is now trading at $174.89, which suggests a potential correction phase might be underway.
With several key Fibonacci retracement levels ahead, traders are watching closely to determine whether this pullback presents a buying opportunity or signals a deeper correction.
Key Fibonacci Support Test
After an extended period of consolidation around the $145-$155 range, Solana staged a bullish breakout in early May, surging approximately 24% to reach the recent high of $179.92. The swift nature of this move suggests strong buying pressure and renewed interest in the asset, but such rapid gains often require consolidation or correction phases to establish sustainable support levels.
Currently, SOL is showing signs of cooling down from this rally, with price pulling back toward the first significant Fibonacci retracement level at 38.2% ($166.41). This area represents the initial support zone that bulls will need to defend to maintain the uptrend’s momentum.
Should this level fail to hold, further support can be expected at the 50% retracement level ($162.23) and the crucial 61.8% golden ratio level ($158.05).
These Fibonacci levels align with the visible ascending trendline on the chart, forming a critical support zone between $158-$166 that could determine the next significant move for Solana. The 100% Fibonacci level at $144.54 corresponds to the breakout point from the previous consolidation range, making this a key level to watch if the correction deepens.
The chart also displays a horizontal blue zone around $150-$160, which appears to have previously acted as resistance before becoming support. This zone coincides with the 61.8% Fibonacci level, enhancing its significance as a potential “line in the sand” for the current bullish trend.
Potential Cooling Period
The moving averages on the chart provide valuable insight into Solana’s longer-term trend. The 100 SMA (blue line) has crossed above the 200 SMA (red line) that traditionally signals a bullish outlook. Both moving averages are sloping upward, with price action trading well above these dynamic support levels, confirming that the overall trend remains positive despite the current pullback.
The momentum indicators, however, suggest that a cooling period may be necessary before the next leg higher. The MACD in the middle panel shows diminishing bullish momentum, with the blue line beginning to cross below the orange signal line as the green histogram bars shrink. This bearish crossover often precedes further consolidation or correction.
The stochastic oscillator in the bottom panel has turned sharply lower from the overbought region, confirming that short-term momentum has shifted in favor of the bears. This indicator suggests that the pullback could continue until the stochastic reaches oversold conditions, potentially coinciding with the key Fibonacci support levels mentioned earlier.
As long as Solana maintains position above this trendline, the bullish structure remains intact with potential for another move toward the recent high and beyond.