Macro guru Raoul Pal believes that Solana (SOL), the rival of Ethereum (ETH), can sustain its rally even after its recent surge. However, he also warns of a possible short-term decline despite the expectations of an upward trend.
SOL Signals “Overbought” with RSI
Former Goldman Sachs executive Pal stated in the latest issue of Global Macro Investor (GMI) newsletter that Solana (SOL), one of the leading altcoins in the cryptocurrency market, has entered an upward trend after breaking out of its classic bullish formation. In his general comment on SOL, the macro guru said, “Last month, it broke out of the inverse head and shoulders formation and has since gained over 475% in value since the beginning of the year. This year, SOL has been one of our fundamental trades in GMI and it has performed really well.”
Based on the Relative Strength Index (RSI), a momentum indicator widely used to determine whether an asset is overbought or oversold, Pal quickly warns that SOL will likely experience a short-term pullback after a rapid surge, stating:
In the short term, SOL’s RSI is at 89 (the highest since September 2021), indicating overbought conditions. Therefore, we may see some selling pressure in the near future. A price correction in SOL should not come as a surprise as it has increased its value by 240% in the past 2 months.
“I Expect the Rise in Solana to Continue”
Meanwhile, taking a broader time frame into consideration, Pal expects the rise in Solana to continue, emphasizing that “When you look back at this price chart over a longer time frame, you realize that this thing still needs to rise.”
The macro guru also added that Solana and other altcoins are in an upward trend after breaking out of the descending wedge formation, indicating a bullish sentiment in their total market capitalization.
