Top 3 Reasons Solana Price May Rebound 20% After This Crash

Solana price crashed today, June 13, as the crypto market plunged following Israel’s attack on Iran. SOL plunged to $141.56, its lowest level since June 5. Still, a double-bottom pattern, exchange-traded funds (ETF) odds, and its historical reactions to black swan events points to an eventual rebound.

Solana Price Technical Analysis: Double-Bottom and Bullish Flag Pattern

Technicals suggest that the Solana price could bounce back in the near term once the geopolitical fears ease. The eight-hour chart shows that the coin dropped to a low of $141.56, which coincided with the lowest point on June 5. It has formed a double-bottom pattern at $141.56 and a neckline at $168. 

The profit target in a double-bottom pattern is calculated by first establishing the pattern height by subtracting the lowest bottom from the neckline price. In this case, the height is $27. After this, you add the neckline price to the height, giving the target price at $195. 

Another bullish catalyst for the Solana price is that it has formed a bullish flag pattern on the daily chart. This pattern comprises two parts: a flag and a flagpole. 

In this case, the flag is made up of a descending channel that connects the lower lows and lower highs since May 12. The slanted flag pole started forming on April 7. The profit target of this pattern is $241. It is derived by measuring the length of the flagpole and the same distance from the breakout point, which is approximately $160.

The bullish Solana price forecast will become invalid if the coin crashes below $120. A move below that level will point to more downside, potentially to $100.

Solana ETF Approval Odds are Rising

The other bullish catalyst for SOL price is that the odds that the Securities and Exchange Commission (SEC) will approve its ETF have jumped to 90%. This is a sign that the Polymarket traders, who have been right on many areas, including the Trump election, expect the approval to happen. 

The odds jumped after Solid Intel reported that the Invesco Galaxy SOL ETF had been registered in Delaware. 

A Solana ETF approval would be bullish for the coin as it would lead to more inflow from American investors. JPMorgan analysts that it would attract $6 billion in assets in the first 12 months. In contrast, Ethereum ETFs have had $3.5 billion in inflows since September last year. 

SOL Price to Rebound as Iran and Israel Fears Ease

It is common for investors to react negatively when there is a major black swan events. For example, SOL price plunged to a multi-month low of $95.4 in April after Trump’s Liberation Day speech, and then bounced back by 96% to $187. 

The same happened in 2022 when it plunged to $9.10 following the FTX collapse. It then bounced back and reached a high of nearly $300 earlier this year. 

Solana and other cryptocurrencies also tumbled at the onset of the COVID-19 pandemic and the Russia-Ukraine war and then bounced back. 

More data shows that Solana’s funding rate crashed to 0.009%, its lowest level since June 6. A negative rate is usually a bearish catalyst for an asset since it signals that investors anticipate its future price to be lower than the current one.

However, the chart shows that Solana price often rises whenever the funding rate plummets. 

Summary

Solana price has crashed as geopolitical risks rise. However, the coin has some technical and fundamental catalysts that may push it higher in the near term. These catalysts include the funding rate, ETF inflows, and the historical perspective.