Arthur Hayes, the former CEO of crypto derivatives exchange BitMEX, has “admitted” to buying Solana’s SOL ( SOL ) at its possible local top, stressing his bullish outlook for the cryptocurrency.

Fam I have something embarrassing I must admit.

I just bot $SOL , I know its a Sam-coin piece of dogshit L1 that at this point is just a meme. But it is going up, and I'm a degen.

Let's Fucking Go!

— Arthur Hayes (@CryptoHayes) November 2, 2023

SOL’s price has rallied 500% in 11 months

Hayes’ self-admitted SOL purchase occurred after it had already rebounded 500% from its market bottom near $8 in December 2022.

In addition, the purchase came days after VanEck, an asset management firm supervising $76.4 billion worth of assets,  predicted a 10,600% SOL price rally by 2030 , citing Solana’s ability to capture the market share of its top layer-1 blockchain rival, Ethereum.

In addition, an analyst from FieryTrading predicted that once Solana breaks the resistance at $38, it could be headed for another 150% increase.

In October 2023 alone, SOL price gained an impressive 80% and recently reached its 14-month high of around $46.75. 

SOL/USD year-to-date price performance. Source: TradingView

Hayes appeared to have bought SOL around the same $46.75 level. He expects the price to continue rising in the coming weeks, perhaps drawing his “degen” cues from Solana’s ongoing scalability efforts .

Solana most “overbought” since January

However, technical and fundamental signals are warning of a potential 30% price drop in November.

Notably, SOL’s relentless uptrend in recent months has pushed its daily relative strength index (RSI) , a momentum indicator, to its most overbought levels since January 2023. From a technical standpoint, overbought RSI readings prompt the underlying assets to correct or consolidate.

In SOL’s case, the possibility of undergoing a sharp correction in November looks more likely. That is primarily due to a fractal analysis, which shows SOL’s overbought RSIs preceding 35%–50% price corrections throughout 2023, as shown below.

SOL/USD daily price chart. Source: TradingView

If this bear scenario happens, the next downside target appears to be around its June–November 2022 support level near $30.25, down about 30% from current prices.

SOL/USD three-day price chart. Source: TradingView

Interestingly, this level coincides with SOL’s 200-3D exponential moving average (200-3D EMA; the blue wave in the chart above). A break below it could have SOL bears test the cryptocurrency’s ascending trendline support near $26 as their next downside target.

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The $26 target, down about 37.50% from current price levels, was instrumental in capping SOL’s downside attempts in June 2022. 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.