Solana Price Analysis: $210 Target Remains Strong Amid 8% Correction

Solana price is a hot topic of discussion in the crypto community as it revived from a 96% crash to become the fourth-largest cryptocurrency by market cap. The asset recently broke out to the upside from a bearish market structure, invalidating it. The price of SOL dropped 8% in the last 24 hours to trade at $169. Despite the correction, SOL price analysis suggests the asset may rally back to the $210 yearly high.

Solana Price Eyes a Bounce

SOL price is in an upward trend as the price has broken out of a descending triangle pattern and is trading above both the 50-day (green line) and 200-day (black line) exponential moving averages (EMA). This signals a strong bullish momentum. Recent candlesticks formation also supports the bullish thesis following the breakout from the descending triangle, with several large green candles indicating strong buying pressure.

A small double-top pattern is currently forming above the descending triangle. Price action is at the neckline around $169, and a break lower may result in a drop to the key support level of $160 (50-day EMA). If the bears persist, Solana price may drop to $138 (200-day EMA), which is inside the triangle. Conversely, a bounce from the 50-day EMA may catapult SOL price to the next major resistance level at $210 in a 30% price upswing.

The Relative Strength Index (RSI) is at 62.35, indicating bullish momentum but nearing the overbought region. A slight pullback might occur before further upward movement. The Chaikin Money Flow (CMF) supports the RSI as it is at 0.12 but facing downward, indicating positive money flow and reducing buying pressure. The Solana trading volume spiked during the descending triangle breakout, confirming the validity of the upward movement. Sustained high volume would support further bullish continuation.

SOL price forecast shows that if the asset breaks below the $138 (200-day EMA) support level, it will signal weakness in the market, resulting in a swing low to the next potential support of $98. This will turn Solana price action bearish and consequently invalidate the current bullish thesis that is supported by the triangle breakout.

SOL On-chain Metrics Support a Bullish Scenario

According to data from the Solana explorer Solscan, the current true TPS stands at 700, with an average transaction success rate of 91%. The high TPS and success rate indicate that Solana is able to scale to more users, which is bullish for the SOL price.

The above premise is reinforced by the growing number of active accounts on Solana, which reached a three-month high on July 31, 2024. This signals investors are streaming into the network, and the Solana price is poised to follow shortly after. 

Additionally, because of the rising number of wallets, Solana’s total value locked (TVL) increased by 19.23% month-to-date, supporting the premise that new investors are gaining confidence and are funneling funds into the network, which is bullish for SOL.

If the TPS drops significantly, it can result in investors fleeing the network. Reduced volume may negatively impact the TVL, causing SOL to be extremely overvalued, hence invalidating the bullish on-chain thesis.