A closely watched crypto trader says Ethereum (ETH) rival Solana (SOL) has the potential to generate exponential profits for long-term investors.
Pseudonymous trader Altcoin Sherpa tells his 196,200 followers on social media platform X that Solana is a fundamentally sound crypto project that could perform well in the next bull market.
Although the analyst is bullish on SOL in the long term, he says say that the road to bull territory will likely be bumpy.
“As a network, SOL is still a good network and will likely be a good choice for the next bull run. I have a long term bag that I’m just holding on to because I expect great multiples on it later. But in the short term it will probably be painful.”
Altcoin Sherpa’s bearish view in the near term stems from the idea that defunct crypto exchange FTX could start liquidating its significant SOL holdings to pay back its creditors.
Court documents show that FTX currently owns approximately $1.16 billion worth of SOL.
According to the trader, the liquidation of FTX could lead to price increases that could send the SOL to a low of $5.
“The next point of interest is the $17-$15.50 area. Many fearful investors regarding a possible liquidation of FTX holdings.
Does this mean SOL is done? No, in fact, I think this big sell-off (if it happens) will create a floor for Solana. It is one of the last big questions regarding the large supply. If FTX is liquidated, expect the price to capitulate below $10 ($5 maybe?), and then V-reverse.”
A V-shaped reversal is a technical pattern in which an asset witnesses a steep move down followed by a large move up.
While Altcoin Sherpa says it is possible for SOL to reach $5, he says the downside target is a “longshot,” and he would rally the Ethereum challenger at $10.
At the time of writing, SOL is worth $17.76.
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Generated image: Midjourney