Reversal or continuation of the correction: what to expect from Solana (SOL) in August
Date: 2023-08-03 Author: Karina Ziganova Categories: BLOCKCHAIN
The price of Solana (SOL) has been falling since July 14, when it hit a yearly high of $32.13. The decline confirmed the $27 horizontal area as resistance.
The readings of the weekly and daily timeframes give different forecasts, so the direction of the trend remains uncertain.
Solana price breaks long-term resistance
The technical analysis of the weekly timeframe shows that in early July, the price of SOL broke above the long-term resistance line that has existed since November 2021. Such breakouts are often indicative of a bullish trend change. If this is indeed the case, Solana can be expected to gradually push back to its previous highs.
It is important to note that the asset failed to overcome the $27 horizontal area, as a result of which a candle with a long upper wick formed on the chart. This indicates growing selling pressure and confirms that the $27 area is strong resistance.
The readings of the weekly Relative Strength Index (RSI) confirm the legitimacy of the breakout. At the moment, it is above the 50 mark, closing the week at these values for the first time since the end of 2021.
However, to confirm the bullish reversal of SOL, it is necessary to break out of the $27 horizontal area and gain a foothold above it.
SOL Price Prediction: Deviation from $27 could be a downside signal
While the weekly timeframe is leaning towards the bullish scenario, the daily timeframe is showing bearish signs. The main reason for this is the move above the $27 resistance area (marked with a red circle on the chart) and the subsequent fall. Such deviations usually lead to sharp downward moves.
After the rejection, Solana's price dropped to $22.73 but is now trading near $24. The daily RSI is just above the 50 line. A move above or below it will help determine the direction of the future trend.
A decisive rebound of the RSI and consolidation above $27 will confirm the possibility of growth. In this case, Solana could rise to the next resistance at $46, which is 93% higher than the current values. However, if the price continues to decline, SOL will fall to the nearest support at $16.50.
