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As the first week of September came to a close, the price of Solana (SOL) settled at $124, raising investor concerns as the fifth-largest cryptocurrency is at risk of breaching the critical $100 threshold.
According to market analyst Ali Martinez, the latest technical analysis refers to A sustained close below the channel’s lower bound at $126 could lead to a major correction in Solana’s price, potentially leading to a drop to $110 or even $90.
Solana Price Challenges
In a social media update, Martinez explained the current market conditions, noting that the TD Sequential had previously provided Buy SignalOn the daily chart, this indicates a potential bounce for Solana from the lower bound of its trading channel towards higher levels at $154 and $187.
However, the ongoing sell-off in the broader market has negated this bullish signal, causing Solana to suffer. losses By about 20% over the past two weeks and 13% over the past month.
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Despite these challenges, there is still a glimmer of hope for Solana’s recovery. Martinez noted that Historical style This suggests that Solana typically sees a price surge in the two weeks leading up to a “breaking point” event.
In 2021, the cryptocurrency rose by 35%, the following year it increased by another 35%, and in 2023 it rose by 60%. With only 16 days left until the “tipping point event” in 2024, the analyst suggests that this trend of the past few years could continue, meaning a major recovery for the currency.
If the historical pattern continues, Solana stock could rise 35% towards $167, but still remain just below ceiling From 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.
Capital inflow from FTX creditors and a historic bullish Q4
Additionally, the events following the Bitcoin (BTC) halving in Q4 have historically shown bullish trends, indicating a potential market recovery that could greatly benefit SOL as well.
In addition to these optimistic forecasts, the now-defunct cryptocurrency 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 major comeback, particularly affecting four major cryptocurrencies.
Analyst Ox Noble Highlights The majority of FTX customers affected are retail investors, suggesting that a significant portion of the recovered funds will likely return to the cryptocurrency market.
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A large share of this money is expected to flow into Bitcoin and other dominant currencies. Cryptocurrencies Such as Ethereum (ETH), Solana, and Binance Coin (BNB). The expected return of capital can not only stabilize the market but also provide an opportunity for price appreciation across these assets.
However, it remains to be seen whether this is indeed the case, but if it is, it could serve as a much-needed catalyst for the market after the strong selling activity that the market’s largest cryptocurrencies have seen in recent months.
Featured image by DALL-E, chart by TradingView.com