Solana has been keeping an eye on broader trends in the crypto market while addressing concerns about recurring network outages and centralization.
Solana (SOL) risks a major price correction in the coming weeks on a classic bearish reversal setup.
35% SOL price correction coming?
On the 3-day chart, the price of SOL has drawn an ascending wedge, which is confirmed by two ascending, converging trend lines and a parallel decrease in trading volume.
Rising wedges usually lead to a breakout, which is resolved after the asset’s price breaks the lower trendline. When price follows a breakout scenario, it can fall to the maximum distance between the upper and lower trend lines of the wedge.
SOL is far from a breakout but is trading in a falling wedge range as shown in the chart below. The token expects an immediate pullback from the upper trendline of the wedge, with its mid-down target at around $45 at the lower trendline.
Three-day SOL/USD price chart. Source: Trade View
There is a risk of it dropping to $30 if the price breaks below the lower trendline on increased trading volume. In other words, a 35% price drop through September.
Conversely, a bounce off the lower trendline could result in SOL immediately returning to the top of the wedge at $53.50.
A decisive break above the upper trendline will invalidate the bearish reversal setup if SOL rises to the 50-3D exponential moving average (50-3D EMA; red wave) near $58.
The fight against food
The Solana Rising Wedge Hack Scheme comes as it grapples with a spate of negative events, including recurring network outages, centralization issues, and a widespread exploit targeting Solana wallets.
However, SOL is up nearly 40% in August, along with other crypto assets, which have gained about 11% on average since the beginning of the month.
Solana also received a portion of the proceeds after her team quickly clarified that Slope, the provider of Web3 wallets, was solely responsible for the $8 million cryptocurrency wallet exploit, including Solana’s wallets.
Similarly, on August 10, Solana released its first “Validator Status Report” in response to allegations that its network was heavily centralized. The Solana Proof-of-History (PoH) blockchain is reported to have 1,900 block production nodes worldwide.
The report adds that almost 88% of these nodes are operated by independent organizations.
Daily SOL/USD price chart. Source: Trade View
Also in May, Solana developers focused on implementing the early stages of their Mainnet Beta v1.10 series, introducing QUIC and Quality of Service (QoS) packages based on deployment weight and board prioritization to the network to protect against possible failures.
Related: Is Your SOL Safe? What do we know about the Solana hack | Find out now in the market report
“It looks like the network has shown signs of stabilization since version 1.10, as transaction fees have fallen and the daily number of transactions has reversed trend between mid-May and late June,” noted James Trautman, a researcher at Messari in its Solana Q2 report.
Use of the Solana Network. Source: Messari/Solscan
Solana’s transactions per second (TPS) have also improved, going from around 700 during network outages to an all-time high of over 3000 since the 1.10 launch. Trautman added:
“If the implementation of v1.10 and beyond continues to offer stability along with successful ecosystem growth strategies, fundamentals are likely to move in a positive direction and the value of the network could be as well.”
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