The traders who experienced unrealized losses owing to the FTX collapse were charged up by the most recent Solana price rally. Since the FTX-related liquidity problem in November, the price of the Ethereum competitor has been steadily declining.
Although the cryptocurrency is now in a bullish overall trend, it is uncertain whether a further surge will occur soon. Bitcoin has finally crossed the significant $17k mark, sending green waves across the market.
Returning to Solana, the coin has shown a very exceptional start to the year as the network’s native cryptocurrency SOL had a significant rally over the past few days. According to the expert who correctly predicted the bottom of Bitcoin’s bear market in 2018, Solana may be preparing for a big retracement. According to analyst Smart Contracter, Solana’s excellent start to the year has probably come to an end.
“Over 112% move from the lows on SOL in a clear V reversal, five-wave impulsive move. One of the clearest I can see across the board, actually. Over the coming weeks, I’d anticipate an ABC correcting that whole run, probably between 25%-35%, but it will likely be a dip to buy.”
The Elliott Wave theory, a technical analysis used by Smart Contracter, seeks to forecast future price movement by observing crowd psychology, which frequently manifests in waves. The theory states that a bullish asset often corrects (ABC wave) following a five-wave advance.
According to the chart of Smart Contracter, at the 0.618 Fibonacci level, SOL is expected to decline below $12. At the time of writing, Solana is trading at $16 and is down by more than 5 percent.
Alex Krüger, an economist, likewise believes that the recent price hikes for SOL are likely coming to an end. Krüger asserts that the shorts that propelled SOL’s rally have already been destroyed.
“Bears wiped out. SOL funding markets back in balance. Think still has room to go, but the outperformance phase is mostly behind.”