As a seasoned researcher with over a decade of experience in the cryptocurrency market, I have seen my fair share of market fluctuations and trends. The recent 7.5% drop in Solana (SOL) price from $164 to $151 on a low-volatility weekend has piqued my interest.
Over the low-key weekend, Solana’s price dipped from $164 down to $151, representing a 7.5% decrease. This dip seems to be linked to a substantial drop in traditional on-chain actions, such as active and new wallet engagements. The question now is: Will Solana’s price rebound with the bullish trend as Bitcoin maintains its position above $60000?
Solana Price Signals Bearish Breakdown
As a seasoned cryptocurrency investor with years of experience under my belt, I have witnessed numerous market fluctuations and trends, but this week has been particularly noteworthy. The surge of Bitcoin from $49600 to $60500, registering a significant 22% growth, has been nothing short of exhilarating. This rally has not only boosted the overall sentiment in the crypto market but also sparked a recovery among major altcoins.
The price of SOL might drop significantly if it goes below its daily Exponential Moving Averages (EMAs) of 20, 50, and 100. If fears about market correction persist, a break below the $150 support could cause SOL to fall approximately 16.5% to $126, testing the triangle pattern’s support level. This potential drop in price might continue due to increased selling momentum.
As an analyst, I’ve observed a significant drop in several crucial on-chain indicators that seem to suggest a bearish outlook for Solana’s price prediction. According to TheBlock analytics, the number of new addresses interacting with the network has plummeted from approximately 1.27 million on August 1st to around 980,680, representing a decline of about 22.79%. This reduction in activity could be a sign that market sentiment towards Solana may be cooling down.
Furthermore, we observed a decrease in the active addresses metric from approximately 2.09 million to 1.6 million, representing a 23.44% drop. This substantial reduction in on-chain activity metrics could suggest less user engagement, possibly predicting continued decreases in SOL‘s market worth if this trend continues.
Contrary to what one might expect, the Solana price demonstrates a medium-term sideways movement in its daily chart, forming a symmetrical triangle pattern. This chart pattern is created by two lines that gradually converge, creating a pause or consolidation phase before the dominant trend can build up strength again.
A low Average Directional Index (ADX) of less than 25% implies that the sellers may be weakening their hold on this asset.
As I observe the market dynamics, it appears that a bounce back in price from the triangle support will likely extend the sideways movement and ward off a significant correction. If this strategy plays out, the buyers might manage to surpass the upper trendline, thereby strengthening the upward momentum of Solana’s price beyond the $200 psychological resistance level.
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2024-08-11 16:46