Solana Price Has Crashed: Here’s Why it May Rebound Soon

Solana price has suffered a harsh reversal in the past few days as investors sell the Federal Reserve interest rate cut news. SOL token was trading at $212, down by 16% from its highest level this month. Still, technical analysis and several fundamental points point to a strong rebound in the near term.

Solana Price Doji Candlestick Signals a Rebound is Coming

The daily timeframe chart shows that the Solana price has plunged in the past few days, moving from this month’s high of $254 to the current $212.

On the positive side, the coin remains above the 100-day Exponential Moving Averages (EMA) and the Major S/R Pivot Point of the Murrey Math Lines at $200.

A closer look shows that the coin is slowly forming either a doji or a morning star pattern, which are some of the most common bullish reversal patterns in technical analysis.

Additionally, the current plunge continues what has been happening since April this year, as the coin has been forming a series of higher highs and higher lows. Investors have always moved and bought the dip whenever it happened.

Most notably, there are signs that the ongoing pullback is part of the fourth phase of the Elliot Wave pattern.

The first phase happened between April and May this year, while the second corrective phase happened until last week. It will then rebound when it moves into the fifth part of the impulse wave. If this happens, the coin may rebound and move to the extreme overshoot level of the Murrey Math Lines at $275 followed by the next psychological level at $300.

The bullish Solana price forecast will become invalid if it plunges below the strong, pivot, reverse point at $180.

Solana ETF Approval to Boost Price

One of the top Solana news stories that will boost its price is that the Securities and Exchange Commission (SEC) has shown its openness of approving crypto ETFs.

For one, the agency has already approved several Act.40 ETFs, including the REX-Osprey Solana + Staking ETF (SSK), which has attracted millions in assets in the past few months.

Solana has the most ETF applications after XRP, with companies like Franklin Templeton, Fidelity, Invesco, and Canary making their submissions. Most importantly, the odds that the agency will approve these funds have jumped to over 80% on Polymarket and Kashi.

The agency has set October as the deadline for most of these funds, meaning that the approvals could be less than three weeks away. Such a move will lead to more demand as Ethereum and Bitcoin have done in the past two years.

Bitcoin and Ethereum ETFs now hold between 5% and 7% of their respective market capitalizations. If Solana ETFs hold just 5%, their assets will be about $5.75 billion.

The SOL ETF approvals will happen as more companies increase their holdings. Solana treasury companies now hold over $2.85 billion coins, with Forward Industries being the biggest holder.

DeFi Development holds Solana coins worth $226 million. Other top holders are companies like Upexi, Sharps Technologies, and Sol Strategies, which launched on Nasdaq earlier this month.

Alpenglow Upgrade to Boost Solana Price

It is common for cryptocurrencies to rally before and after a major upgrade. For example, Ethereum has jumped to a record high a few years after it completed The Merge. Most recently, it surged after the network implemented the Pectra upgrade.

Solana price may rebound before and after the upcoming Alpenglow upgrade, bringing new features like the movement from proof-of-authority to proof-of-staking and boosting network speeds to over 100,000 transactions per second (TPS).

This upgrade, which will happen in the first quarter of next year, will make Solana a better network as demand for its solutions jumps. Nansen data shows that the network is now handling over 2 billion monthly transactions, making it the most active chains in the industry.