Bitcoin’s Strength Shines Through Solana FUD
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| By Juan Villaverde |
For the first time in over two weeks, Bitcoin (BTC, “A”) is flirting with the $100,000 level.
At the time of writing, it just touched $99,500 …
And with that, it confirms what I told you two weeks ago.
This correction is a regular, bull-market pullback.
Indeed, my Crypto Timing Model suggests Bitcoin will recover and could even push through to new all-time highs before the cycle peaks later this year.
But while Bitcoin remains strong, altcoins are still struggling.
Most of them — including major names like Ethereum (ETH, “B+”) and Solana (SOL, “B”) — topped out by mid-December.
Right in line with my Crypto Timing Model’s forecast of a significant cycle peak.
Since then, Ethereum has fallen from $4,000 to under $3,000 — a brutal correction that rattled investor confidence.
Solana’s fall is even more dramatic. After briefly poking above $300 on Jan. 19, it plummeted to $160 in under a month.
However, let me be clear: Nothing fundamental has changed in Solana.
To this day, it remains the most active open blockchain on the planet, having taken that spot from Ethereum in 2023.
So, if Solana’s fundamentals are still standing strong, that leaves us with only one question …
What Actually Happened to Solana?
Broad market conditions certainly played their part in SOL’s recent decline.
But the major catalyst was an unexpected controversy involving Argentine President Javier Milei and his apparent support of a fraudulent crypto project.
President Milei kicked up controversy when he promoted a new memecoin, Libra (LIBRA, Not Yet Rated) … which was built — as many memecoins are — on the Solana network.
However, only a few hours after his endorsement, LIBRA crashed from $4 to 50 cents, causing many to denounce the project as a scam.
Milei denounced the project and deleted his supportive posts … but the damage was done.
And Solana ended up in the crossfire.
My roots in South America go pretty deep. I grew up immediately adjacent to Argentina, in Uruguay. So, I can say firsthand that the political fallout has been devastating.
There are already calls for Milei to resign as media reports swirl about his alleged ties to the scam.
While those claims are almost certainly overblown — and Milei was likely blindsided like everyone else — political perception still matters.
A lot.
Julius Caesar famously said a leader must be “above suspicion.” And Milei has certainly failed that test. Whether or not he had anything to do with the scam, the mere possibility damages his credibility.
The exact same thing is true for crypto as a whole.
A lot of people still see the industry as a Wild West of fraud and speculation. High-profile scams like this only reinforce that skepticism.
This is a key reason the market has taken this incident so seriously and reacted so strongly … even though Solana’s rock-solid fundamentals remain unchanged.
Winds of Change
Now, I do not believe Solana will disappear. On the contrary, it’s likely headed a lot higher over the very long run.
Even in the short term, a bounce back to $200 or beyond is still possible.
But something has changed. The aggressive uptrend that defined Solana’s past year is starting to show cracks.
SOL Flirting with a Key Trendline
In the chart above, you can see SOL’s price dipping below a key black uptrend line.
This isn’t what we want to see.
Typically, when a crypto asset closes three consecutive days below this trendline, it signals the end of its bull market.
Before I continue, I want to make two things very clear.
First, Solana has not confirmed a trend shift just yet.
In fact, there is still hope SOL might yet rebound above its black uptrend line. You’ll need to decide for yourself if that risk is worth HODLing … or too large for your tolerance.
Second, even if an altcoin as large as Solana tops out now, that does not mean the entire crypto market is in trouble.
Bitcoin remains an exception. It’s holding up well, and I expect it to lead the market into the next leg higher.
Bitcoin Continues to Look Quite Strong
Just yesterday, Bitcoin hovered near $96,000 — the same level it first hit 18 days ago (on Feb. 2) …
The same day my Crypto Timing Model shifted Bitcoin’s trend to NEUTRAL.
Now, as I said at the start, it’s trading closer to $99,500.
Not only has the downside been limited since the trend shift … BTC seems ready to challenge the significant $100,000 level.
All of this is a good sign.
It suggests prices will likely recover.
And when they do, we can expect to see BTC hit a new all-time high once the next low is in.
Best,
Juan Villaverde
