Solana (SOL), the fifth largest cryptocurrency by market capitalization, may face a substantial price correction. Crypto analyst Ali Martinez has highlighted a potential bearish scenario that could trigger a price drop to $90.
Analyst's Warning
Ali Martinez noted that Solana has been consolidating within a parallel channel since April, with a lower boundary at $126. He believes SOL's movement within this trading pattern might have ramifications in the short- to midterm.
Current Market Situation
Cryptocurrencies continued to fall on Saturday, extending Friday's bearish move that brought Bitcoin to its lowest point in a month. Although a few cryptocurrencies are trading up, others, like Solana, have fallen 3.19% in the last 24 hours to $127. The SOL token is also down 7.18% weekly.
Key Levels to Watch
As the crypto market faces selling pressure, the crucial level to watch, according to Ali, is the lower boundary of the SOL parallel channel at $126. A sustained close below this level would signal a breakdown from the channel, indicating that selling pressure could intensify. In this scenario, a sustained close below the highlighted key level at $126 might trigger a significant Solana price correction to $110 or even $90. In the event of a price rebound, SOL could rebound from the channel's lower boundary toward the middle or upper boundaries, positioned at $154 and $187, respectively. While the market's outlook remains bleak, history presents a silver lining to SOL price action. According to Ali, historically, two weeks before the Solana breakpoint occurrence, SOL prices tend to rise. It increased by 35% in 2021, 35% in 2022, and 60% in 2023. The market closely watches if this historical trend might repeat as the Solana breakpoint event approaches.
Solana's market position remains uncertain, and investors should closely monitor key levels. Historical data suggests potential growth before a breakout, but the cryptocurrency's volatility leaves room for unpredictability.
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