Crypto Analyst Predicts Massive Solana Price Drop Using Elliott Waves – TradingView News

In a technical analysis, renowned crypto analyst Gert van Lagen presented an extremely bearish outlook for Solana (SOL), suggesting that its price is poised for a substantial decline. Van Lagen’s analysis draws on the famous Elliott Wave Theory, a methodology that seeks to identify recurring patterns and cycles in market price movements.

Why Solana Price Could Crash

At the heart of Van Lagen’s analysis is a dissection of Solana’s price action over the past few years. According to his assessment, 2021 marked the culmination of a clear Elliott Wave trend for Solana, signaling the end of a bull cycle. This uptrend is characterized by a specific five-wave pattern, with the final wave acting as the culminating move before a reversal.

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In 2022, Van Lagen’s analysis identifies the unfolding of Bearish Wave A, which he characterizes as the first stage of a prolonged bear market. Importantly, this A wave exhibits a distinct pattern of five subwaves, consistent with the principles of Elliott wave theory. The presence of these sub-waves is a key indicator of the likelihood that the downtrend will persist, as they are believed to reflect underlying market sentiment and psychology.

In 2023, Van Lagen observed the formation of Wave B, a corrective rally within the broader context of the bear market. Just like the A wave, this B wave is made up of five sub-waves, adhering to the Elliott wave model for corrective movements. Identifying this B wave is crucial, as it suggests that the overall downtrend is not yet completely exhausted and further downside momentum may be occurring.

As the analysis moves toward 2024, Van Lagen expects the C wave to materialize. As part of the Elliott Wave, Wave C is the final leg of the broader bear market cycle, and its appearance could mark the completion of the ongoing downtrend for Solana.

Notably, Van Lagen’s analysis also highlights the presence of bearish divergence on the weekly Relative Strength Index (RSI), a widely used momentum oscillator. A bearish divergence occurs when price makes higher highs while the RSI fails to confirm those highs, potentially signaling an upcoming trend reversal or loss of bullish momentum.

Van Lagen posted via X: “I’m out of SOL -> ready for the next step. 2021: Finalization of a clean Elliottwave; 2022: Descending wave of a prolonged bear market <- 5 sub-waves; 2023: Wave B of a prolonged bear market <- 3 sub-waves; 2024: expectations are falling. Bearish divergence on the weekly RSI.

In particular, the analyst refrains from specifying an exact price target. However, the blue arrow on the chart suggests that van Lagen predicts that SOL price could fall to around $13. Such a drop would represent a dramatic price drop of more than 90% from current price levels.

A 50% chance of this happening

In his commentary, Van Lagen acknowledged the risks associated with his short position in Solana, calling it a “50/50 trade” and “courageous.” However, he defended his decision by saying that it is based on a “good theoretical framework” and that it serves as a hedge against his long positions in other assets. The analyst stressed the importance of analyzing the isolated chart without emotion, emphasizing the need for objectivity in technical analysis.

“Shorting SOL is a 50/50 transaction, bold, but also a hedge against my long positions. There is good reason to do so when looking at the isolated graph without emotion. It’s a risky job and I’m aware of it. But also supported by a good theoretical framework,” he said.

Although Van Lagen’s analysis presents a bearish outlook for Solana based on Elliott Wave Theory, it is crucial to recognize that the broader crypto market often moves in tandem with Bitcoin. This correlation raises questions among other market players. One user summed up the feeling by commenting: “This is really strange. Do you think BTC will rise in the coming weeks but SOL will fall? We are still in a market structure where big coins are not going down much while Bitcoin is going up.

At press time, SOL was trading at $165.

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