Solana eyes 40% jump in August despite long-term bearish signals
Solana (SOL) dipped to a two-week low at around $35.50 on July 26, mirroring downside moves elsewhere in the crypto market. Nonetheless, technicals suggests that Solana's price flirts with the prospects of rising 40% in August.
Ironically, the bullish setup for Solana emerges out of a classic bearish continuation pattern.
On the daily chart, SOL's price has been consolidating inside what appears to be a "bear flag," a technical pattern that develops during a downtrend and gets resolved after the instrument exits it with further price drops.
The so-called bear flag breakdown has not happened yet. Instead, SOL has been holding the lower trendline as support, raising possibilities of a sharp rebound toward the upper trendline, as illustrated in the chart below.
The rebound setup exposes SOL to a potential rally toward $49.50 in August, up 40% from today's price. The $49-$50 level had served as both support and resistance in May.
The potential bear flag rebound will serve as interim relief to Solana bulls, given SOL's overall bias remains skewed to the downside.
Macro forces such as the Fed's hawkish monetary policies and the collapse of the $40 billion "algorithmic stablecoin" project Terra have sent the crypto market into a tailspin. As a result, Solana, like any other risky asset, has suffered declines across its financial and network usage metrics in 2022.
For instance, the average number of daily transactions atop the Solana blockchain plunged by 17.6% in Q2/2022 versus the previous quarter, according to data from Messari.
Meanwhile, Solana's revenue dropped 44.4% quarter-on-quarter (also because of recurring network outages).
"As seen in 2021 and throughout Q1 and Q2, degraded network performance decreases network usage and
Read more on cointelegraph.com
