The Decline of Solana’s Price
The price of Solana (SOL) has experienced a decline after facing rejection at the $27 horizontal resistance level in July. Analysis of the daily timeframe suggests that this downward trend is likely to persist in the near future.
Long-Term Resistance and Breakout Confirmation
Upon examining the weekly timeframe, it becomes apparent that SOL’s price broke through a declining resistance line in July. Despite this breakout, the price encountered resistance at the $27 level, forming a notable upper wick (red symbol). This upper wick reinforces the $27 area as a significant resistance zone. The confirmation of this breakout hinges on the price of SOL closing above the $27 level.
Weekly Relative Strength Index (RSI)
The Weekly Relative Strength Index (RSI) provides insights into the bullish stance. RSI is a commonly used momentum indicator that helps assess whether a market is overbought or oversold, aiding in decisions to buy or sell an asset.
- If the RSI value is above 50 and trending upward, it indicates a favorable position for the bulls.
- If the RSI value is below 50, it suggests a less favorable position for the bulls.
Currently, RSI is above 50 (red circle), but it has not decisively crossed this threshold. As a result, the possibility of dropping below this level remains.
Confirmed Trend and Potential Scenarios
For a confirmed upward trend, it’s crucial to see both a clear recovery in RSI and a price close above the $27 level. Conversely, if the descent continues, there’s a potential for a 35% drop to the $16 resistance line.
Recent Developments in Solana Network
Within the Solana Network, there are several noteworthy developments:
- Saga Mobile, a part of Solana, has reduced the prices of its web3 smartphone by 40% to encourage adoption.
- Solana’s Cypher protocol experienced a security breach resulting in a $1 million exploit.
- Solana launched a new application that rewards AI data providers with cryptocurrency.
Daily Trend and Price Prediction
Unlike the neutral weekly timeframe analysis, the daily trend for SOL is currently on a downtrend. This can be attributed to breaching the $27 resistance area, followed by a decline below it. Additionally, a lower high was formed below the resistance line on August 14th (red symbol). These lower high points and the failure to reach the $27 zone signify weakness. The daily RSI has dropped below 50 (red circle) and continues to decrease.
If the decline persists, there’s potential for SOL’s price to decrease by 33% and reach a rising support line at $15.40.
Potential Upside and Conclusion
Despite the downward-biased price prediction for SOL, a close above the $27 area would indicate an ongoing upward trend. In such a scenario, the next resistance at $46 could lead to a potential 96% increase as a future price scenario.
