Analyst Warns of Solana’s Downtrend Despite Recent Rally, FTX Factor in Play

Pseudonymous crypto strategist Altcoin Sherpa has recently sounded an alarm for Solana (SOL) enthusiasts. Despite SOL’s impressive 8% rise from its seven-day low, trading at $19.04 when writing, Sherpa warns that the cryptocurrency is still facing a downtrend. Significantly, the crypto is meeting a crucial resistance level at approximately $19.50.

According to Sherpa, the situation continues Solana’s bearish trend since its 2023 peak of $32.30 in July. He suggests that every rally in the past few weeks has led to another lower high. “It’s good to see some recovery, but be cautious,” he advises. Additionally, he states that investors could accumulate at sub-$20 levels if looking at long-term investments.

However, there’s a significant twist. Should SOL fail to maintain its latest rally, Altcoin Sherpa predicts that the $14 level could be a robust support. But here’s the kicker: Solana’s stability above the $14 mark largely depends on how bankrupt crypto exchange FTX liquidates its gigantic Solana stash, worth $1.16 billion. Consequently, Sherpa believes it will take some time for Solana to find a stable bottom.

Moreover, investor Chris Burniske takes a different stance. Despite acknowledging the potential risk stemming from FTX’s massive holdings, he informs his 263,400 followers that only about 13% of FTX’s SOL assets are liquid. Burniske, a partner at crypto-focused VC firm Placeholder, is long-term bullish on SOL despite its FTX-related concerns.

In his view, every cryptocurrency has its baggage, much like ETH and BTC, which have hit new all-time highs despite challenges. Hence, the setbacks related to FTX’s financial woes should allow investors to see the long-term potential of Solana.

To sum up, the future of Solana is hanging in the balance with various factors in play. Between resistance levels, FTX’s uncertain liquidation, and contrasting views from analysts, the next few months promise to be a fascinating period for SOL watchers.

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