Solana (SOL) has been grappling with significant market challenges, reflecting the broader instability in the cryptocurrency market. Over the past 24 hours, the SOL/USD pair has declined by 4.52%, a drop that underscores the vulnerability of this once-high-flying digital asset. Currently, SOL is trading at $147.09, down from its weekly peak of $162, raising concerns among investors and traders alike.
The SOL/BTC pair hasn’t fared any better, slipping from a high of 0.0025359 BTC earlier in the week to its current level of 0.0024544 BTC. This downward trajectory across various SOL pairs suggests that further declines could be imminent, especially if predictions from seasoned analysts come to fruition.
Bearish Signals On The Horizon?
Crypto analyst Benjamin Cowen recently voiced concerns about SOL’s future, drawing parallels between SOL/BTC and the historical performance of ETH/BTC. In a tweet, Cowen highlighted a concerning trend: SOL/BTC appears to be mimicking the movements of ETH/BTC, which experienced a dramatic 90% drop following its 2017 peak before recovering with a 500% surge. Now, ETH/BTC is once again in a downward phase, raising alarms for SOL’s trajectory.
Cowen’s analysis suggests that SOL/BTC could be headed for a similar downturn. After hitting an all-time high in 2021, SOL/BTC also suffered a 90% decline, followed by a significant rebound. However, if history repeats itself, the pair may be poised for another substantial drop, potentially erasing gains for both long-term traders and investors.
According to AMBCrypto, this potential correction isn’t limited to SOL/BTC. Other SOL pairs, including SOL/USDT and SOL/USD, could also see significant losses, given their close correlation with SOL/BTC. As these pairs are more widely traded, they may be more susceptible to the broader market’s downturn.
The Impending Correction: Will It Impact All SOL Pairs?
A close examination of the price movements of SOL/BTC and SOL/USD reveals a strong alignment between the two pairs. Both assets have mirrored each other’s highs and lows, with only occasional discrepancies. This suggests that any correction in SOL/BTC is likely to have a ripple effect on other SOL pairs.
If SOL/BTC continues to follow the bearish trend established by ETH/BTC, it could spell trouble for the broader Solana market. However, there is a glimmer of hope. Cowen remains cautiously optimistic about the long-term prospects of SOL/BTC, suggesting that after a corrective phase, the pair could recover and potentially reach new highs.
A Bullish Formation Could Alter the Narrative
Despite the prevailing bearish sentiment, there is still a possibility that SOL/BTC could defy expectations. Currently, the pair is trading within a bullish ascending triangle pattern on the daily timeframe. This formation typically indicates the potential for a significant price surge, provided the asset remains within the pattern for an extended period.
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AMBCrypto points out that a similar pattern in 2021 preceded SOL/BTC’s rally to a new all-time high of 0.0046700 BTC. If this pattern holds, SOL/BTC could break free from its historical correlation with ETH/BTC and chart a new course, potentially driving up the value of other SOL pairs as well.
The next few weeks will be crucial for Solana’s market performance. While the current outlook suggests that SOL pairs, including SOL/USD, could face further declines, the presence of a bullish ascending triangle pattern offers a glimmer of hope. Investors should keep a close eye on these developments as they could determine the future trajectory of Solana in the volatile cryptocurrency landscape.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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