In a technical evaluation, famend crypto analyst Gert van Lagen offered an especially bearish outlook for Solana (SOL), suggesting that its value is poised for a considerable draw back transfer. Van Lagen’s evaluation is underpinned by the extensively acclaimed Elliott Wave Principle, a strategy that seeks to determine recurring patterns and cycles in market value actions.
Why The Solana Worth May Crash
On the core of Van Lagen’s evaluation lies a dissection of Solana’s value motion over the previous few years. In keeping with his evaluation, the yr 2021 marked the end result of a clear Elliott Wave development for Solana, signaling the tip of a bullish cycle. This uptrend is characterised by a selected sample of 5 waves, with the ultimate wave performing because the climactic transfer earlier than a reversal.
Shifting into 2022, Van Lagen’s evaluation identifies the unfolding of the A-wave down, which he classifies as the primary leg of a protracted bear market. Crucially, this A-wave down displays a definite sample of 5 subwaves, aligning with the ideas of the Elliott Wave Principle. The presence of those subwaves is a key indicator that the downtrend is prone to persist, as they’re believed to mirror the underlying market sentiment and psychology.
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In 2023, Van Lagen noticed the formation of the B-wave, a corrective rally throughout the broader bear market context. Similar to the A-wave, this B-wave consists of 5 subwaves, adhering to the Elliott Wave Sample for corrective actions. The identification of this B-wave is essential, because it means that the general downtrend has not but been totally exhausted and that additional draw back momentum could also be forthcoming.
Because the evaluation shifts to 2024, Van Lagen’s expectation is for the C-wave to materialize. Within the Elliott Wave Framework, the C-wave is the ultimate leg of the broader bear market cycle, and its incidence would probably mark the completion of the continuing downtrend for Solana.
Notably, Van Lagen’s evaluation additionally highlights the presence of bearish divergence on the weekly Relative Energy Index (RSI), a extensively used momentum oscillator. Bearish divergence happens when the value makes greater highs whereas the RSI fails to verify these highs, probably signaling a forthcoming development reversal or a lack of bullish momentum.
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Van Lagen posted by way of X: “I’m quick on SOL –> prepared for the subsequent leg down. 2021: Finalized a clear Elliottwave up; 2022: A-wave down of extended bear market <- 5 subwaves; 2023: B-wave of extended bear market <- 3 subwaves; 2024: Expectation is C-wave down. Bearish divergence on the weekly RSI.”
Notably, the analyst refrains from specifying a precise value goal. Nonetheless, the blue arrow on the chart means that van Lagen anticipates the SOL value may plummet to roughly $13. Such a decline would characterize a dramatic value crash of greater than 90% from the present value stage.
A 50% Probability That This Will Occur
In his commentary, Van Lagen acknowledged the dangers related along with his quick place on Solana, characterizing it as a “50/50 commerce” and “ballsy.” Nonetheless, he defended his determination by stating that it’s backed by a “good theoretical framework” and serves as a hedge towards his lengthy positions in different property. The analyst emphasised the significance of analyzing the remoted chart with out emotion, underscoring the necessity for objectivity in technical evaluation.
“Brief on SOL is a 50/50 commerce, ballsy, but additionally a hedge towards my lengthy positions. There’s good purpose to take action when trying on the remoted chart with out emotion. It’s a dangerous commerce and I’m conscious of it. But additionally backed by an excellent theoretical framework,” he said.
Whereas Van Lagen’s evaluation presents a bearish outlook for Solana based mostly on the Elliott Wave Principle, it’s essential to acknowledge that the broader crypto market usually strikes in tandem with Bitcoin. This correlation raises questions amongst different market individuals. One person encapsulated this sentiment by commenting, “That is actually unusual. You assume BTC will transfer up within the coming weeks however SOL will transfer down? We’re nonetheless in a market construction the place massive cash don’t transfer down that a lot whereas Bitcoin is transferring up.”
At press time, SOL traded at $165.
Featured picture created with DALL·E, chart from TradingView.com
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