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This Is Why Solana (SOL) $180 Price Prediction Could Be a Bull Trap

2 mins
Updated by Daria Krasnova
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In Brief

  • Solana has risen 9.2% in the past week but faces risks, with a -0.72 Sharpe ratio signaling caution.
  • Falling SOL/ETH value further indicates that Solana reinforces the notion of a potential bull trap.
  • SOL's failed attempt to break the $150 resistance recently suggests a potential decline to $127.92.
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Despite the growing optimism around Solana’s (SOL) price, several indicators suggest caution. Following its recent rise, some predictions claim SOL could revisit the $180 mark.

However, while it’s tempting to follow the crowd, this analysis warns that such a price target could be a classic bull trap, where early optimism lures investors before the price takes a sharp downturn.

Solana Investors Should Be Wary

Over the past seven days, Solana’s price has risen by 9.20%, reaching $143.35. However, the Sharpe ratio suggests caution for those looking to buy SOL for short-term gains. The Sharpe ratio measures risk-adjusted returns, and while it applies to both traditional and digital assets, cryptocurrencies carry significantly higher risk.

A higher Sharpe ratio indicates a better risk-reward balance, but Solana’s Sharpe ratio has dropped to -0.72, according to Messari data. This decline suggests that the potential returns may not justify the risks involved in buying at the current price.

This points to the possibility that the $180 price prediction could be a bull trap. A bull trap happens when an asset’s price rises, attracting investors, only for the uptrend to reverse, leading to losses for those who bought in at the peak.

Read more: Solana vs. Ethereum: An Ultimate Comparison

Solana price shows bearish signal
Solana Sharpe Ratio. Source: Messari

Another indicator supporting the cautious outlook is the SOL/ETH pair, which shows Solana’s price relative to Ethereum. When the SOL/ETH pair rises, it means Solana is outperforming ETH. However, a decline indicates that ETH is now outperforming Solana.

From June to August, Solana outpaced Ethereum by 63.94%, pushing the pair’s value to 0.062. Over the past three days, however, this value has dropped by 6.27%, bringing it down to 0.054. A similar trend is observed in the Solana/Bitcoin (BTC) pair. If this downward trend continues, Solana’s short-term price target of $180 may not be achieved.

Solana price performance versus Ethereum
SOL/ETH Price Performance. Source: TradingView

SOL Price Prediction: Bullish Momentum Slows Down

Yesterday, Solana’s price attempted to break above $150 but was met with resistance, preventing it from moving higher. This rejection has kept SOL trading within the $134 to $150 range since last Monday.

Additionally, the Relative Strength Index (RSI), which tracks momentum, has turned downward, signaling weakening bullish momentum. This shift suggests that a price decrease may be on the horizon, with SOL potentially falling to $127.92 if the current trend continues.

Read more: 6 Best Platforms To Buy Solana (SOL) in 2024

Solana Daily Price Analysis.
Solana Daily Price Analysis. Source: TradingView

However, if the bulls manage to breach the $150 resistance on another attempt, Solana’s price could break out and climb toward $161.74.

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Victor Olanrewaju
Victor Olanrewaju is a technical and on-chain analyst at BeInCrypto, where he monitors the activities of mid- and large-scale investors, commonly known as crypto whales, to detect investment trends across diverse cryptocurrencies, including Bitcoin, altcoins such as Solana, XRP, Cardano, and Toncoin, as well as meme coins like Dogecoin, Shiba Inu, and Pepe. Additionally, he covers emerging trends including Tap-to-Earn games, AI tokens, and real-world assets (RWA). Before joining BeInCrypto...
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