Arthur Hayes, the former CEO of crypto derivatives exchange BitMEX, recently revealed that he purchased Solana’s SOL cryptocurrency at its potential local peak. Despite acknowledging that Solana is considered by some to be a “Sam-coin piece of dogshit L1” and a meme, Hayes expressed his bullish outlook for the cryptocurrency. His admission follows an impressive rally in SOL’s price, which has gained 500% in just 11 months.
Hayes made his SOL purchase after the cryptocurrency had already rebounded from its market bottom near $8 in December 2022. Additionally, his decision coincided with VanEck’s prediction of a 10,600% price rally for Solana by 2030. VanEck praised Solana’s ability to capture market share from its top competitor, Ethereum, as the reason behind its optimistic outlook. Furthermore, an analyst from FieryTrading predicted a potential 150% increase in SOL’s price once it breaks through the resistance level at $38.
In October 2023, SOL experienced a remarkable 80% price gain, reaching its highest point in 14 months at around $46.75. This is the approximate level at which Hayes made his purchase. He expects the price to continue rising in the coming weeks, likely drawing inspiration from Solana’s ongoing scalability efforts.
While Hayes remains optimistic, technical and fundamental signals suggest a potential 30% price drop for Solana in November. The cryptocurrency’s relentless uptrend has pushed its daily Relative Strength Index (RSI) to its most overbought levels since January 2023. Historically, overbought RSI readings have often preceded corrections or consolidations in the underlying asset. In SOL’s case, a sharp correction appears more likely due to fractal analysis, which indicates that overbought RSI levels have accompanied 35%-50% price corrections throughout 2023.
If this bearish scenario unfolds, the next downside target for SOL would be around the June-November 2022 support level near $30.25, representing a 30% decrease from current prices. This level aligns with SOL’s 200-3D exponential moving average (EMA), and a breach below it could lead to a test of the cryptocurrency’s ascending trendline support near $26.
It is worth noting that the $26 target played a crucial role in limiting SOL’s downward movements in June 2022. If it fails to hold as support, bears may aim for this level as their next downside target. However, it is important to remember that investing in cryptocurrencies carries inherent risks, and readers should conduct their own research and exercise caution when making investment decisions.
In conclusion, Arthur Hayes’ admission of purchasing SOL at its possible local top highlights his bullish outlook for Solana. The cryptocurrency’s impressive price rally over the past 11 months and positive predictions from analysts and asset management firms contribute to this optimism. However, technical indicators suggest a potential correction in November, which could test crucial support levels for SOL.
