The Long-Term Bullish Outlook
While Altcoin Sherpa expresses a long-term bullish sentiment towards SOL, he cautions that the path to reaching bull territory may encounter some turbulence.
“As a network, SOL is still a good one and will probably be a solid bet for the next bull run. I’ve got a long-term bag that I’ll just hold because I expect great multiples on it later on. But in the short term, it’s likely going to be painful.”
Altcoin Sherpa’s short-term bearish view is rooted in concerns regarding the defunct crypto exchange FTX, which may initiate the liquidation of its substantial SOL holdings to repay creditors.
Court documents reveal that FTX currently holds approximately $1.16 billion worth of SOL.
According to the trader, the potential liquidation by FTX could trigger a cascading effect on prices, potentially causing SOL to plummet to as low as $5.
The Crucial Juncture: $17-$15.50 Area
Altcoin Sherpa highlights the $17-$15.50 price range as a point of significant interest, with many investors feeling apprehensive about the possibility of FTX’s holdings liquidation.
However, he remains optimistic about SOL’s resilience, stating:
“Does this mean that SOL is done? No, in fact, I think this big sell-off (if it happens) creates a bottom for Solana. It’s one of the last big questions in regard to the big supply. If FTX gets liquidated, expect the price to capitulate to sub $10 ($5 maybe?), and then V reverse.”
A V-shaped reversal, characterized by a sharp decline followed by a substantial upward move, is a technical pattern that Altcoin Sherpa envisions for SOL.
Weighing the Possibilities
While Altcoin Sherpa acknowledges the possibility of SOL reaching $5, he regards this downside target as a “longshot.” Instead, he suggests considering accumulation of the Ethereum challenger at the $10 mark.
At the time of writing, SOL is valued at $17.76.
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