The SOL price of Solana is facing a significant downside risk, with a classic technical setup indicating a potential 40% crash in the coming weeks. Meanwhile, this risk is attributed to a substantial sell-off and profit-taking by short sellers, adding pressure to the cryptocurrency’s value.
Solana Shrouded in a Bearish Cloud
Despite SOL’s current trade at approximately $91.7, reflecting a commendable 50% surge from its recent low of $55, red flags are waving. The cryptocurrency’s rally appears to be losing steam, evident in the dwindling relative strength index (RSI) on the three-day chart.
As SOL’s price achieves higher highs, the RSI drops from a robust $99 to around $91.30, signaling a potential bearish divergence.
The unraveling tale of technical tensions doesn’t stop there. Another concerning divergence emerges between SOL’s ascending price and a decline in three-day trading volumes. This early warning signal implies that the bullish trend might be running out of steam, raising the specter of an imminent trend reversal.
Recent price stabilization around $91, aligning with the 0.236 Fibonacci retracement line from Q1 2022, becomes a pivotal point. Should the bearish divergence signals materialize into a correction, SOL could see a substantial 40% dip, settling near $62 by January 2024.
Arthur Hayes’ Divine Move
In an unexpected twist, BitMEX founder Arthur Hayes made a notable shift in his investment strategy on the X platform. Hayes, claiming to receive a divine “message” during meditation, decided to move away from Solana (SOL) and focus on Ethereum (ETH), referring to Ethereum co-founder Vitalik Buterin as “Archangel Vitalik.”
This divine guidance led Hayes to sell his Solana holdings and increase his investments in Ethereum, accompanied by a bold prediction of Ethereum’s price reaching $5,000.
The timing of Hayes’s strategic move adds a layer of intrigue to the ongoing narrative, aligning with Solana’s remarkable surge in the market. SOL has recently climbed toward the $100 milestone, surpassing XRP and securing the 4th spot in the cryptocurrency rankings.
