Solana Aims for a 40% Increase Next MonthJuly 26, 2022
SOL fell to a low level of two weeks near $35.50 on the 26th of July. It is a reflection of a downward glide in the general crypto market. Nevertheless, technical analysis indicates that SOL prices might be heading toward a 40% rise in August.
SOL Strikes a Major Inflection Point
It is ironic that Solana’s bullish hopes have emerged from a bearish wave. SOL’s price has been consolidating within what happens as a bearish flag. It is a pattern that comes up in the course of a downturn.
The bearish flag breakdown is yet to happen. SOL has rather been holding firmly to the lower trendline for support. It has increased the possibility of a rapid recovery in the direction of the upper trend lines.
The recovery’s setup opens SOL up to a possible rally in the direction of $49.50 next month. That will be a 40% jump from its current price. The $49-$50 figure served as both points of resistance and support in the month of May.
The expected bearish flag recovery will be the short-term recovery plan of Solana bulls. Since SOL’s general bias is falling downward.
The Pain of Macro Issues
Macro issues like the Federal Reserve’s hawkish policies and the collapse of Terra sent the crypto market nosediving. Solana, like other risk-sensitive assets, suffered a heavy decline in its usage measurement.
The number of average daily transactions on the Solana network dropped by 17.6% in the second quarter. And the network’s revenue also fell by 44.4% Q-on-Q. the several network outage also has a hand in the network’s shortfall, however.
A researcher at Messari stated that poor network performance affected network usage. James Trautman also said that was responsible for the reduced revenue inflow.
He added that if Solana continued experiencing poor network performances that last long, the drag of basic usage will aid volatility.
The combination of network-related and macro issues caused the bearish flag breakdown. SOL closure under the lower trend of the flag means another downside. It might be in the region of $21-$23.
A number of assets in the crypto market have been staging a slight comeback. Bitcoin and Ethereum are also doing their best but Bitcoin is not yet so impressive.