Could Solana (SOL) pull off a 65% rally despite another network halt?

Key Takeaways:

  • Solana token's daily technicals indicate gains ahead.
  • The four-hour chart backs the bullish claims.
  • Solana Network halt could dampen the price advances.
image from medium.com
image from medium.com

YEREVAN (CoinChapter.com) – Solana’s native token SOL kicked the month off with a 10% price drop but attempted to retaliate on June 2 with a 4% recovery. As a result, the token stood at just below $40 at Thursday’s London session opening bell after a turbulent week of Bitcoin-led ups and downs.

SOL daily technicals confirm the bullish setup

As Coinchapter covered in the previous Solana review, SOL could promise substantial gains for investors in Q3-Q4 2022, with a target advance as high as 350%. In detail, the token formed a falling wedge on the daily chart, which was still relevant in Thursday’s Asian-Pacific session.

Also read: Is Solana (SOL) a buy after losing 50% in May? Technicals are conflicting.

Solana (SOL) daily chart, featuring a Falling Wedge. Source: TradingView.com
Solana (SOL) daily chart featuring a Falling Wedge. Source: TradingView.com

The Wedge features two converging trendlines with a critical mid-range. They enclose the price action and gradually drive the value down. However, the Falling Wedge is a bullish reversal pattern. Thus, it forecasts a breakout after the Solana token completes the formation by consecutively retesting both trendlines.

SOL price action rebounded from the lower trendline on May 28 and again on June 2. However, traders don’t feel confident in the current bear market and abstain from ‘buying the dip,’ which would put weight behind the SOL rally.

Instead, the rebounds are unconvincing, given the lowering trading volumes. Thus, another support retest is likely in the works in the upcoming sessions, testifying that Solana’s bottom is not in yet.

Also read: Solana (SOL) crashed after the weekend rally – what to expect?

Solana’s four-hour chart bullish after all?

In the previous session’s review, Solana seemingly painted a Descending Triangle on the four-hour chart, which is a bearish continuation pattern, and contradicted the bullish outlook.

However, a closer look after the rebound on June 2 revealed another Falling Wedge on the smaller time frame. Furthermore, the trendlines of the smaller setup match the lower trendline and the mid-range of the described larger Wedge. The daily chart above marked the smaller Wedge with blue lines.

Also read: Solana-based NFT game Plutonians to launch two Metaverse and Ecosystem tokens on April 19.

Zooming into the four-hour chart helped to see the formation more clearly. The local price target for the Solana token would stand at $65, or approximately at the larger Wedge’s resistance, backing the daily chart’s claim. Notably, the possible target would constitute a 65% price advance from SOL’s current value.

Solana (SOL) four-hour chart, featuring another falling wedge. Source: TradingView.com
Solana’s (SOL) four-hour chart features another falling wedge. Source: TradingView.com

Also read: The anti-crypto lobby is gaining momentum in Washington.

What about Solana fundamentals?

While SOL flashed bullish setups on the charts, Solana Network experienced another outage on June 1. As confirmed by the subreddit devoted to the platform, Solana had halted for over 5 hours, causing the Network’s total value locked (TVL) to drop by $21 million.

Solana (SOL) TVL on June 2. Source: DeFiLlama.com
Solana (SOL) TVL on June 2. Source: DeFiLlama.com

Reportedly, the system halt was caused by a bug in how the blockchain processes a niche transaction type designed for offline use-cases. As a result, validators disabled the so-called “durable nonce transactions” and restarted the Network. However, those transactions will remain canceled until developers identify the culprit behind the consensus mechanism malfunction.

The outage was not the first in Solana’s history, which could cast a shadow on the token’s reliability for traders. Thus, the possible 65% jump could be compromised.

Also read: Crypto prices mirror stocks’ rebound as executives buy the dip.

Notably, Solana’s price action also depends on Bitcoin and, by extension, on the broader fiat economy. The Federal Reserve kicked off its quantitative tightening policy on June 1, which could prompt traders to flock to the strengthening greenback instead of relying on the crypto market. Thus, altcoins, such as Solana, could fall as collateral damage, despite bullish technicals.

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