Solana (SOL) faces 16% loss in value, but optimistic forecasts raise hope amid decline

Solana (SOL) is currently in a sustained downtrend, reflecting the instability of the broader cryptocurrency market. Over the past month, SOL has lost 16% of its value, and over the past 24 hours, its value has dropped 1.6%, now trading at around $141. This decline comes alongside a 42% reduction in trading volume.

Despite these challenges, industry experts remain optimistic about Solana’s future. Raoul Pal, CEO of Real Vision, predicts that it will lead the crypto market into a new bull phase. Pal has invested 90% of his crypto portfolio in SOL and cites two crucial factors for his bullish stance: NFT compression and Firedancer.

NFT compression provides low-cost, scalable, non-fungible tokens with wide application possibilities across various sectors. Firedancer, a third-party validator software, aims to improve Solana’s speed, scalability, and efficiency. These innovations could strengthen its position and potentially reverse its current downward trend.

Bullish outlook for Solana

Crypto analyst XForceGlobal also supports Solana’s bullish forecast through his technical analysis. He highlights two primary structures shaping Solana’s price action: the WXY pattern and a possible triangle formation. The WXY pattern, which is nearing its resolution, indicates a possible uptrend.

The WXY pattern consists of three corrective waves that indicate complex price behavior but often precede significant price moves. Alternatively, the potential triangle formation, a classic technical analysis structure, signals the continuation of the prevailing trend, which could mean an uptrend for SOL.

The timing of this potential rally is predicted to be around September-October. During this time, Solana could complete its fifth wave, a crucial phase in the Elliott Wave cycle, which provides a robust framework for understanding market cycles and investor behavior. This phase will be crucial in determining its future market behavior.

Solana’s current trading price is $141.45, reflecting a robust uptrend supported by an ascending channel and the 50-day Exponential Moving Average (EMA) at around $139.55. However, maintaining this positive trend will largely depend on the ability to hold above the critical support level of $138.80. A break below this level could trigger a bearish trend reversal.

In terms of resistance levels, there are critical thresholds at $144.40, $148.00, and $151.00, which are crucial points to monitor for potential breakout opportunities. Meanwhile, relative strength at 50.74 suggests a neutral market sentiment. Solana technical analysis suggests further upside potential if it sustains above $138.80.

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