While facing worries about recurrent network disruptions and centralization, Solana is following larger crypto market developments.
Due to a traditional bearish reversal pattern, Solana (SOL) faces a major market decline in the upcoming weeks.
SOL’s price has been depicting a rising wedge on the three-day chart, which is supported by two ascending, convergent trendlines and concurrently declining trade volumes.
Rising wedges frequently collapse and resolve after the asset’s price breaks below the lower trendline. Price could fall as far as the maximum distance between the upper and lower trendlines of the wedge if the breakdown scenario is realised.
As can be seen in the chart below, SOL is far from a breakdown and is trading within a falling wedge range. The token anticipates a swift reversal from the wedge’s top trendline, with the lower trendline, at about $45, serving as its short-term downside objective.
Solana Prices May Experience A 35% Drop In The Coming Months:
If the price declines below the lower trendline and is accompanied by an increase in trading volume, it runs the risk of tumbling toward $30. In other words, a price decrease of 35% by September.
On the other hand, a bounce from the lower trendline might cause SOL to aim for a quick rebound toward the wedge’s peak, which is somewhere around $53.50.
The bearish reversal setup would be invalidated if SOL rose to the 50-3D exponentially moving average (50-3D EMA; the red wave) around $58.
Solana is battling a flurry of unfavourable incidents, including as recurrent network outages, centralization issues, and a massive exploit that specifically targeted Solana wallets, which is why the increasing wedge breakdown setup is seen.
Nevertheless, SOL increased by almost 40% in August, following the trend of other crypto assets, which have generally increased by around 11% month to date.
A portion of Solana’s winnings also came after its staff swiftly stated that Slope, a provider of Web3 wallets, was entirely in charge of the $8 million crypto wallet attack that affected all of them, including Solana’s.