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As the primary week of September concluded, the Solana (SOL) price settled at $124, raising concerns for investors because the fifth largest cryptocurrency risks breaching the critical $100 threshold.
In keeping with market analyst Ali Martinez, recent technical evaluation indicates that a sustained close below the channel’s lower boundary at $126 could trigger a big price correction for Solana, potentially dropping to $110 and even $90.
Solana Price Challenges
In a social media update, Martinez elaborated on the present market conditions, noting that the TD Sequential indicator had previously presented a buy signal on the each day chart. This suggested a possible rebound for Solana from the lower boundary of its trading channel towards higher levels at $154 and $187.
Nonetheless, the broader market’s ongoing selloff has invalidated this bullish signal, causing Solana to suffer losses of roughly 20% over the past two weeks and 13% within the last month.
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Despite these challenges, there stays a glimmer of hope for Solana’s recovery. Martinez identified a historical pattern indicating that Solana typically experiences a price upswing within the two weeks leading as much as its “Breakpoint event”.
In 2021, the cryptocurrency surged by 35%, the next yr it increased by one other 35%, and in 2023 it soared by 60%. With only 16 days left until the 2024 “breakpoint event,” the analyst suggests that this trend of the past few years could proceed, which might mean a big recovery for the token.
If the historical pattern holds, Solana could potentially rally 35% towards $167, but remain slightly below the upper limit of its current channel at $187. Nonetheless, as Martinez identified, the hot button is for SOL to recuperate and consolidate above the $126 level in the approaching days to avoid further declines.
Influx of Capital From FTX Creditors And Historically Bullish Q4
Further adding some sense of hope for SOL investors, the fourth quarter post-Bitcoin (BTC) Halving events has historically shown bullish trends, suggesting a possible market recovery that might also profit SOL significantly.
Adding to this hopeful outlook, the now-defunct crypto exchange FTX is ready to distribute over $16 billion in money to creditors affected by its collapse. This influx of capital into the market could signal a considerable return, particularly impacting 4 key cryptocurrencies.
Analyst OxNobler highlights that a majority of the affected FTX clients are retail investors, indicating that a significant slice of the recovered funds is more likely to re-enter the crypto market.
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The expectation is that a considerable share of those funds will flow into Bitcoin and other dominant cryptocurrencies akin to Ethereum (ETH), Solana, and Binance Coin (BNB). The anticipated return of capital not could stabilize the market but in addition present a chance for price increases across these assets.
Nonetheless, it stays to be seen if that is indeed the case, but whether it is, it could possibly be a much-needed catalyst for the market following the strong sell-off activity that the most important cryptocurrencies in the marketplace have experienced in recent months.
The 1D chart shows SOL’s price trending downwards. Source: SOLUSDT on TradingView.com
Featured image from DALL-E, chart from TradingView.com