Will Solana (SOL) Price Crash Hard After Its 30% October Rebound?

Solana (SOL) has had an incredible ‘Uptober’ so far, having risen by over 16.50% month-to-date, including a 30% rebound from the month’s lowest point. Thus, it has outperformed its top-ranking rivals like Bitcoin (BTC) and Ethereum (ETH), which have jumped 13.25% and 11.60% in the same period, respectively.

Why is Solana (SOL) Price Going Up?

The bullish catalysts driving Solana prices higher in October include the launch of the Radar Hackathon Directory, which features over 1,300 project submissions, and a Developer Bootcamp aimed at real-world application development.

The push towards real-world application development further enhances Solana’s ecosystem, drawing investors’ and builders’ attention. It is also accelerating growth by helping developers build practical applications on the network, fueling its long-term value proposition.

In addition, New York-based investment firm Grayscale has filed with the United States Securities and Exchange Commission (SEC) to convert its Digital Large Cap Fund (GDLC) into an ETF, primarily composed of Bitcoin (75%), Ethereum (19%), and Solana (4.05%).

🚨 BREAKING 🚨

GRAYSCALE IS MARKETING THEIR
SPOT BITCOIN ETF ON NEW YORK
TIME SQUARE 🇺🇸

NOW PEOPLE WILL SEE ADS ABOUT
BITCOIN EVERYWHERE. THIS IS VERY
BULLISH FOR BTC. MORE EYE WILL SEE THESE ADS EVERYDAY 🔥

pic.twitter.com/qT9j42pvaV

— Ash Crypto (@Ashcryptoreal) January 21, 2024

The potential ETF conversion legitimizes Solana’s place alongside Bitcoin and Ethereum in institutional portfolios, increasing exposure for SOL before traditional investors.

Meanwhile, the return of ‘memecoin mania’ added to Solana’s upside boom in October, as FXEmpire’s Ibrahim Ajibade covered here. Primarily, Solana has benefitted from increased on-chain activity and liquidity as traders and investors flock to the network.

Historic.

Solana is doing more volume than THE ENTIRE ETHEREUM + L2 ECOSYSTEM in the last 24 hours.

Bullish on $SOL. pic.twitter.com/E8UM2fiAlC

— gumshoe (@0xGumshoe) October 20, 2024

Solana Technical Analysis: A Major Correction Next?

Solana’s price rally has accompanied a rise in its momentum on daily charts, with its relative strength index (RSI) reading now above 70 — an “overbought” zone.

An overbought RSI typically precedes a correction or consolidation period. In Solana’s case, the next move could be a correction, as it trades around a stubborn falling trendline resistance constituting a descending triangle pattern.

To explain, Solana has already broken above the falling trendline resistance and should technically be eyeing a rally toward $250 in the coming weeks. However, an overbought RSI increases the prospects of a sharp price correction, akin to what the market witnessed in the July-August 2024 session (marked by red circles).

Should a correction ensue, the SOL price can decline toward the falling trendline at around $150. A further dip increases its probability of crashing toward the triangle’s horizontal trendline support at around $130, down about 25% from the current price levels.

However, a rebound from the falling trendline could have SOL continue its bull run toward $250, measured after adding the maximum distance between the triangle’s two trendlines to the current breakout point at $155.