Solana Technical Analysis Summary:

  • Falling Channel Price pattern in Daily Charts. 

  • Support at $26 and Resistance at $30.5.

  • Bearish Trend expected in near term.

  • Very close to 52-week low of $26.06.

Solana has been in a downtrend since October 4, 2022. The cryptocurrency is the 9th largest by market cap and is a part of a large ecosystem of blockchains, DeFi, protocols, NFTs and scaling solutions.

What is Solana?

Solana is an open source project that comprises several Web3 solutions. It was launched in March 2020 by the Solana Foundation (founded by Anatoly Yakovenko).

The platform has the Solana blockchain at its core which works on unique consensus mechanism. The base consensus is achieved by Proof-of-Stake (through 2090 validators)  which and scaling is achieved by Proof-of-History, which uses timestamps to validate transactions. Currently as of October 25, 2022, the network has a transaction speed of about 4500 Transactions per second(TPS).

Some of the major constituents of the Solana ecosystem are:

  • Solana Coin (Cryptocurrency)

  • Solana Blockchain

  • Solend DeFi protocol

  • Solana NFTs

Technical Analysis

Solana has been showing a Descending Channel Chart Pattern on daily charts(each pattern) since October 4. Current trend shows that the price is very likely to move in negative direction and in correlation with the overall bear market trend.

Solana Technical Analysis

For the analysis, have used daily charts where each price update represents the timeframe of 1 day. The technical indicators used in the analysis are RSI, MACD, and Volume. We have also used chart patterns to analyze the price action.

Relative Strength Index

The RSI is below 40 which shows that the cryptocurrency is oversold. But, the RSI has been falling even further which shows weak momentum and therefore the prices may fall even further.

Moving Average Convergence Divergence

The MACD line is below the signal line which indicates that the trend is bearish in the near term. However, the difference between the lines is very narrow which also indicates that if any reversal in prices happen, it will occur suddenly.

Volume

Volume has been decreasing since the past few days and shows that investors and traders are wary of the near future. This shows that there is uncertainty in the near future.

This could be a result of the upcoming FED meeting on November 1-2, 2022. The FED is expected to hike rates lower than 0.75% due to US Senate mid term elections.

Descending Channel Chart Pattern

The price has been in this channel since past three weeks. If the price breaks this channel on the downside, further fall in prices is expected. If this channel is breaks on the upper side, there will be a trend reversal towards higher prices.

Price Prediction

2022

For the year 2022, Solana is expected to trade between $20-$35. If the US FED rate hikes are slower, then $35 could be achieved by the end of the year. But, if the FED rate hike is 0.75% or higher, it could signal a price movement towards $20.

The 52-Week low is $26.02.

2025

The price may cross $260 by 2025. For the year 2025, we are expecting a full market recovery for Solana and since it is one of the cryptocurrencies. It will benefit from government regulations. Proper regulation will help check competition from small competitors. It will also led to the inflow of institutional investment.

However, frequent network outages are still a big issue.

2030

Since a large ecosystem of projects use Solana coin for signing transactions and paying gas fees, it could lead to a great demand of the coin. By 2030, Solana could cross $400.

Disclaimer

Crypto markets are highly volatile. Please be careful while investing or trading. The above analysis is purely from an educational perspective. Traders and investors should exercise due precaution when trading with real money. Please consult a financial advisor before making any investments or trade.