SOL Price Crashes 18%, On-chain Metrics Remain Bullish: $200 Retest Soon?

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During the middle of the week, both Solana’s price and the overall market saw a substantial drop. Beyond the general downward trend in the crypto market, intensified selling pressure can be linked to geopolitical tension between Iran and Israel, causing fear, uncertainty, and doubt (FUD) among investors. Despite falling 18% this week, Solana’s price currently stands at a critical support level, hinting at potential recovery, backed by on-chain development.

SOL Price Preparing for Post-Correction Rally

Last month, SOL price noted a 60% recovery, pushing it from $121 to $193.8. This uptick assisted the altcoin to reclaim 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs) at $160, $154, and $140, respectively.

During this period of recovery, buyers of SOL managed to break free from a four-month price range on July 19th as they surpassed the resistance level of the triangle pattern. This chart formation, which is recognized by two lines converging towards each other, typically compresses the asset’s price into a limited band before unleashing the accumulated momentum for a potential directional surge.

At the moment, Solana’s price stands at approximately $164.5. This value is slightly higher than the combined support of its 50-day and 100-day moving averages (MA) at around $160. Additionally, Solana is testing the upper trendline of a previously mentioned triangle, which could act as a base for potential growth if buyers decide to enter the market. This situation might initiate a possible upward surge.

In such a case, the SOL price forecast a rally that revisits $210, followed by $260.

SOL Price Crashes 18%, On-chain Metrics Remain Bullish: $200 Retest Soon?

The bullish on-chain data supports this positive outlook for SOL. The number of new addresses interacting with the Solana network has consistently increased since May 2024. On August 1st, the number of New Addresses metrics surpassed a significant milestone of 1.25 million.

Additionally, even with the recent downturns in Solana’s pricing, the count of active addresses consistently remains over 2 million.

In summary, the consistent increase in both new and active users suggests strong user involvement and acceptance with Solana, which could lead to an upward trend in its price. These incredibly positive fundamental factors serve as a foundation for continued growth in the SOL price.

If the Solana price breaks through its $160 support on the daily chart, it might lead to increased selling, potentially causing the altcoin to fall further. This situation could cause the bullish prediction to become invalid and trigger a 24% drop down to the next support at $130.

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2024-08-02 17:10