2024-9-7 09:30 |
As the first week of September concluded, the Solana (SOL) price settled at $124, raising concerns for investors as the fifth largest cryptocurrency risks breaching the critical $100 threshold.
According to market analyst Ali Martinez, recent technical analysis indicates that a sustained close below the channel’s lower boundary at $126 could trigger a significant price correction for Solana, potentially dropping to $110 or even $90.
Solana Price ChallengesIn a social media update, Martinez elaborated on the current market conditions, noting that the TD Sequential indicator had previously presented a buy signal on the daily chart. This suggested a possible rebound for Solana from the lower boundary of its trading channel towards higher levels at $154 and $187.
However, the broader market’s ongoing selloff has invalidated this bullish signal, causing Solana to suffer losses of approximately 20% over the past two weeks and 13% in the last month.
Despite these challenges, there remains a glimmer of hope for Solana’s recovery. Martinez pointed out a historical pattern indicating that Solana typically experiences a price upswing in the two weeks leading up to its “Breakpoint event”.
In 2021, the cryptocurrency surged by 35%, the following year it increased by another 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 continue, which would mean a significant recovery for the token.
If the historical pattern holds, Solana could potentially rally 35% towards $167, but remain just below the upper limit of its current channel at $187. However, as Martinez pointed out, the key is for SOL to recover and consolidate above the $126 level in the coming days to avoid further declines.
Influx of Capital From FTX Creditors And Historically Bullish Q4Further adding some sense of hope for SOL investors, the fourth quarter post-Bitcoin (BTC) Halving events has historically shown bullish trends, suggesting a potential market recovery that could also benefit SOL significantly.
Adding to this hopeful outlook, the now-defunct crypto exchange FTX is set to distribute over $16 billion in cash to creditors affected by its collapse. This influx of capital into the market could signal a substantial return, particularly impacting four key cryptocurrencies.
Analyst OxNobler highlights that a majority of the affected FTX clients are retail investors, indicating that a significant portion of the recovered funds is likely to re-enter the crypto market.
The expectation is that a substantial share of these funds will flow into Bitcoin and other dominant cryptocurrencies such as Ethereum (ETH), Solana, and Binance Coin (BNB). The anticipated return of capital not could stabilize the market but also present an opportunity for price increases across these assets.
However, it remains to be seen if this is indeed the case, but if it is, it could be a much-needed catalyst for the market following the strong sell-off activity that the largest cryptocurrencies on the market have experienced in recent months.
Featured image from DALL-E, chart from TradingView.com
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