At the end of the first week of September, the price of Solana (SOL) settled at $124, raising concerns among investors as the fifth-largest cryptocurrency threatens to cross the critical $100 threshold.

According to market analyst Ali Martinez, the latest technical analysis indicates that a sustained close below the lower channel boundary at $126 could trigger a significant correction in Solana price, potentially falling to $110 or even $90.

Solana’s Pricing Challenges

In a social media update, Martinez discussed the current market situation, noting that the TD Sequential indicator previously showed buy a signl on the daily chart. This suggested a possible bounce of Solana from the lower boundary of its trading channel towards higher levels at $154 and $187.

However, the ongoing sell-off in the broader market invalidated this bullish signal, resulting in losses for Solana. losses by about 20% in the last two weeks and 13% in the last month.

Despite these challenges, there is still a glimmer of hope for Solana’s recovery. Martinez pointed to historical pattern pointing out that Solana typically experiences price increases two weeks prior to a “tipping point event.”

The cryptocurrency surged 35% in 2021, rose another 35% the following year, and is set to surge 60% in 2023. With just 16 days left until the “tipping point” in 2024, the analyst suggests that this trend of the past few years could continue, which would mean a significant boost for the token.

If the historical pattern holds, Solana could potentially gain 35% towards $167 but remain just below upper limit its current channel at $187. However, as Martinez pointed out, the key for SOL is to recover and consolidate above the $126 level in the coming days to avoid further declines.

Capital inflow from FTX creditors and historically bullish Q4

Additionally, lending some hope to SOL investors, Q4 events following the Bitcoin (BTC) halving have historically shown bullish trends, suggesting a potential market recovery that could also significantly benefit SOL.

Adding to this hopeful outlook is the fact that the now-defunct cryptocurrency exchange FTX is set to distribute over $16 billion in cash to creditors affected by its collapse. This influx of capital into the market could mean a significant return, especially for four key cryptocurrencies.

OxNobler Analyst overview of the most critical events that the majority of affected FTX customers were retail investors, indicating the likelihood that a significant portion of the recovered funds will return to the cryptocurrency market.

A significant portion of these funds are expected to go to Bitcoin and other dominant cryptocurrencies. cryptocurrencies such as Ethereum (ETH), Solana, and Binance Coin (BNB). The expected return of capital could not only stabilize the market but also provide an opportunity for the prices of these assets to rise.

The question remains whether this is actually the case. If so, it could be a much-needed catalyst for the market after a weighty sell-off in the market’s largest cryptocurrencies in recent months.

Featured image from DALL-E, chart from TradingView.com