Solana price crashed for four consecutive days, reaching a low of $210, its lowest level since September 8. SOL token has plunged by about 17% from its highest level this year, bringing its market capitalization to over $114 billion.
Solana price technical analysis points to more downside
Technical analysis suggests that the Solana price has more downside to go in the coming weeks. First, the coin has formed a small double-top pattern at $250 and a neckline at $230. This is one of the most popular bearish patterns in technical analysis.
Second, the coin has formed a giant rising wedge pattern, which comprises of two ascending and converging trendlines. The bearish breakdown happened as the two trendlines neared their confluence.
Third, the SOL price retreated after it moved to the ultimate resistance level of the Murrey Math Lines. It is common for an asset to retreat after hitting that resistance level.
Oscillators have also pulled back in the past few weeks. The two lines of the MACD indicator have crossed each other, while the Relative Strength Index (RSI) is pointing downwards.
Therefore, the most likely scenario is where the coin drops to the strong, pivot, and reverse point of the Murrey Math Lines and then stages a strong comeback.
Why the SOL price is crashing and why it may rebound
The main reason why the Solana price is crashing is that it is mirroring the performance of the broader crypto market, which has plunged in the past few days.
Bitcoin has dropped from the year-to-date high of $124,000 to the current $112,000, while the market capitalization of all tokens has dived to $3.8 trillion. It is common for Solana and other altcoins to drop when the sector is not doing well.
Solana price is also falling after experiencing a huge liquidation event on Monday, as the plunge started. The bullish liquidations jumped to a multi-month high of $98.7 million.
$15 million worth of positions were liquidated on Tuesday, followed by $19 million on Wednesday. In most cases, investors tend to stay in the sidelines after going through a major liquidation event.
Top catalysts for Solana coin
On the positive side, Solana price has two major catalysts that will push it higher in the coming weeks.
The first major one is that the Securities and Exchange Commission (SEC) will likely approve the multiple spot SOL ETFs that have been filled this year. Polymarket data shows that the odds of these approvals have jumped to over 90%.
Solana ETFs will likely attract inflows from American investors because it is often seen as the biggest rival to Ethereum, which has already attracted over $13 billion in inflows. JPMorgan analysts expect that these funds will attract over $6 billion in assets in their first year
The other important catalyst for the Solana price is the upcoming Alpenglow upgrade, which will be launched in the next few months. Alpenglow will make Solana better by boosting its speeds and transitioning it from a proof-of-authority network to a proof-of-staking network like Ethereum and Avalanche.
Solana network will also benefit from the potential interest rate cuts by the Federal Reserve. The bank slashed rates by 0.25% last week and officials hinted towards more cuts later this year. Solana is uniquely positioned to benefit from these cuts as it is the biggest chain for meme coins, which will benefit when rates are cut.
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