Unless the price breaks through the descending wedge pattern to the upside, it is not convenient to trust too much. There might be a respite before the value of SOL drops again to a support zone of around USD 22.
The price action of Solana (SOL) could be very pessimistic if a negative catalyst adds to the general bearish sentiment in the crypto market. However, it has been holding up quite a bit despite the constant outages on the network.
SOL is trading at around USD 37.46 and has accumulated a 5.3% loss over the last 24 hours. While its daily trading volume is above USD 1.16 billion, its market capitalization is about USD 12.81 billion. It occupies 9th place in the cryptocurrency ranking, according to CoinGecko.
That altcoin has been one of the most successful projects in the crypto ecosystem for the last two years. However, the continuous interruptions on the network have caused uncertainty among investors.
The most recent outage on the Solana network, which lasted around four and a half hours, occurred on June 1st. The biggest one, taking place in January, lasted about 18 hours.
Even though the price reacted to the downside due to that development, the bulls have recently defended that coin.
Daily Technical Analysis of the Price of Solana
The daily SOL/USDT graph shows that the price has remained locked in a descending wedge pattern. That chart figure indicates that there might be a pullback.
The prediction of the figure is more likely to be correct as it formed above relevant support around USD 40.
The RSI indicates a bullish divergence between the price chart and the indicator to support that view.
Since the previous trend is bearish, it is not time to trust too much unless the price breaks through the above figure to the upside. For that reason, the target of the bulls is to exceed the barrier at USD 42.29.
If the price lost support at USD 37.37, it would delay a possible short-term rally.
A Rally Would Only Be a Respite before Dropping Again
After over two months of continuous decline, the daily chart shows signs of bearish exhaustion, suggesting that a rally might occur soon.
However, a dominant medium-term bearish strength could still exert pressure on the price. It seems there will be a respite before the value of SOL drops again. The following relevant support zone is around USD 22.
It is necessary to remember that the trend in the price remains bullish in the long term. The drop over the last few months is just a correction in that direction. There should not be further strong selling with over 85% retracement from the all-time high.
The price of SOL might start a rally in the short term, which will make it more attractive. Even though the Solana network has had continuous outages, the crypto asset has remained strong. However, it is convenient to research before investing in this or another project to avoid losses.
By Alexander Salazar
