In a technical evaluation, well-known cryptocurrency analyst Gert van Lagen is extraordinarily pessimistic concerning the prospects of Solana (SOL), indicating that its value is predicted to fall considerably. Van Lagen’s evaluation is predicated on the acclaimed Elliott Wave Principle, which seeks to determine recurring patterns and cycles of market value actions.
Why Solana Worth Could Plunge
The core of Van Lagen’s evaluation is an evaluation of Solana’s value motion over the previous few years. Based on his evaluation, 2021 marks the height of Solana’s clear Elliott Wave pattern, marking the top of the bullish cycle. This uptrend is characterised by a particular five-wave sample, with the ultimate wave being the climactic transfer earlier than the reversal.
Heading into 2022, Van Lagen’s evaluation recognized the unfolding of the Wave A downtrend, which he labeled as the primary stage of a secular bear market. Crucially, this descending A-wave displays a singular sample of 5 sub-waves, in line with the ideas of Elliott Wave Principle. The presence of those sub-waves is a key indicator {that a} downtrend might proceed, as they’re thought to mirror underlying market sentiment and psychology.
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In 2023, Van Lagen noticed the formation of wave B, a corrective rally inside the context of a broader bear market. Like Wave A, this Wave B consists of 5 sub-waves and follows the Elliott Wave sample in its corrective motion. Figuring out this B wave is essential because it signifies that the general downtrend has not but been utterly exhausted and additional downward momentum could also be on the best way.
Because the evaluation shifts to 2024, Van Lagen expects Wave C to materialize. Within the Elliott Wave framework, Wave C is the ultimate wave of a broader bear market cycle, and its emergence might mark the completion of Solana’s ongoing downtrend.
Notably, van Lagen’s evaluation additionally highlighted the presence of bearish divergence on the weekly relative energy index (RSI), a broadly used momentum oscillator. Bearish divergence happens when value makes increased highs and the RSI fails to substantiate these highs, which can sign an imminent pattern reversal or a lack of bullish momentum.
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Van Lagen posted by way of 5 sub-waves; 2023: Wave B of secular bear market <- 3 sub-waves; 2024: Wave C anticipated to say no with bearish divergence in weekly RSI.
It is price noting that analysts did not specify an actual value goal. Nevertheless, the blue arrow on the chart signifies that van Lagen expects SOL costs to plummet to round $13. Such a decline would imply a big value drop of greater than 90% from present value ranges.
There’s a 50% probability of this occurring
In feedback, Van Lagen acknowledged the dangers related to Solana’s brief place, describing it as a “50/50 commerce” and “daring.” Nevertheless, he defended his determination, saying it was supported by a “good theoretical framework” and allowed him to hedge his lengthy positions in different property. The analyst emphasised the significance of analyzing remoted charts with out emotion and burdened the necessity for objectivity in technical evaluation.
“Shorting SOL is a 50/50 commerce, daring, but in addition a hedge in opposition to my lengthy place. When taking a look at an remoted chart with out emotion, there are good causes for doing it. It’s a dangerous commerce, I do know that. But it surely’s additionally backed up by theoretical framework,” he stated.
Whereas Van Lagen’s evaluation presents a bearish outlook for Solana primarily based on the Elliott Wave Principle, it’s essential to acknowledge that the broader crypto market sometimes strikes in tandem with Bitcoin. This correlation has raised questions amongst different market individuals. One consumer commented: “That is actually bizarre. Do you assume BTC will go up within the subsequent few weeks, however SOL will go down? We’re nonetheless in a market construction the place when Bitcoin goes up, the large cash don’t go down an excessive amount of many.
At press time, SOL was buying and selling at $165.
Featured picture created with DALL·E, chart from TradingView.com
