Solana token has been badly impacted by the recent happenings in the crypto space. The token depleted heavily due to the mounted bearish market sentiments but lost a large chunk of market participants as it stood exposed to the FTX collapse.
However, the token managed to regain momentum with the launch of BONK, the Dogecoin of Solana, and the price inflated to some extent. But a steep downfall of SOL price in the long term appears to be imminent.
The SOL price gained more than 30% in the past 48 hours, driven by a 110% jump in the BONK prices as the market participants witnessed a ray of hope during the current market downtown. Along with the rise in price, a notable jump in the active address was witnessed.
Moreover, in the coming days, the bearish action is assumed to be intensified which may drag the token to new lows.
The quick rebound of the SOL price in the past few days has induced significant belief within the market participants who expect future growth. Woefully, the price may certainly not remain inflated for a longer time frame. The Solana project and its price are connected to the FTX which may take months or even years to resolve.
Secondly, the SOL/USDT price is entering the liquidity zone between $13 to $16. Here the possibility of a massive sell-off emerges as the traders who took long positions in November 2022 and experience a 50% drop may exit their position. Additionally, the ones who bought SOL with limit orders at a liquidity level of $8 may close their position with 70% to 100% profit
Therefore in the mid-term, the price has formed an inverted Head & Shoulders pattern where a risky buy zone is around $10. Further, after a brief consolidation, a conservative purchase may drive the price up to $16 with a target could be set at $31 for the pattern.
It is worth understanding that the ongoing FTX proceedings may have a huge impact on the Solana price. One news or an announcement may drive the price extremely down with the lower target below $5 at $3.7 initially and later at $2.25 or even $1.65 too.