Solana’s Correction May Be Over — Price Action Hints at Bullish September

Solana has been stuck in neutral since March, mirroring the broader crypto market’s lackluster performance.

However, beneath the surface, a subtle yet intriguing pattern has been unfolding.

A series of higher lows and lower highs has been etched into the charts, hinting at a consolidation phase that’s been slowly building momentum.

But just as it seemed like this pattern was on the verge of collapse, Solana staged a remarkable recovery on Aug. 5, dodging a potentially disastrous lower low and rekindling hopes of a breakout.

With this newfound resilience, bulls are now eyeing a potential September surge, wondering if Solana will finally shatter its consolidation shackles and make a decisive move upward.

So, will Solana break free, and if so, how high will it soar?

SOL Recovers After Plunge

After hitting a yearly high of $210 on March 16, Solana has been locked in a downtrend that bottomed out at $110 on Aug. 5. However, The brief yet pronounced correction culminated in a noticeable rebound, fueling optimism among traders.

The bounce created several bullish signs:

• Validated the $125 horizontal support area,
• Created a very long lower wick
• Saved a breakdown from a symmetrical triangle

After the bounce, SOL recovered and now trades in the middle of the symmetrical triangle.

The wave count suggests that the price action shows a completed wave four, which had exactly half the length of the preceding wave.

A breakout from the triangle will confirm that SOL has started the fifth and final wave of its increase, which has a target of $273. The 1.61 external Fibonacci retracement of wave four creates this target.

If a breakout happens, it would lead to a bullish September for Solana.

Solana’s Indecision Continues Despite Bounce

Throughout Solana’s price history, the $130 horizontal level has stood as a crucial region, consistently acting as both support and resistance since August 2021. This level has played a significant role in shaping the cryptocurrency’s price trajectory.

Previously, Solana’s price broke out above $130 in March, propelling it to its yearly high of $210.

However, the price returned to this level on two separate occasions, first in April and then again in July. Both times, the price bounced off the $130 level, indicating that it remains a significant support area.

Despite the upward movement initiated by the second bounce, Solana’s price has failed to make progress.

The current weekly candlestick is taking on a bearish form, a concerning sign for the bullish outlook. Furthermore, the long upper wicks (black circles) indicate selling pressure, suggesting that bears are actively pushing the price down.

Technical indicators like the MACD and RSI further add to this indecision. While both are above their bullish thresholds at 0 and 50, respectively, neither is trending upward. Also, the MACD seems to have made a bearish cross.

So, the weekly time frame SOL price chart is inadequate in predicting the future SOL price movement.

Solana Continues Leading On-Chain Activity

Compared to other blockchains, Solana is leading the pack regarding on-chain activity. The first sign of this is the gigantic lead in transaction count over the past 30 days, at 8.5 billion. TRON is in second place at a distant 205 million transactions.

The number of monthly active users shows a similar increase.

Solana has had 17.5 million active users in the past month, while TRON is second at 13 million.

So, on-chain data from transaction counts and users point to Solana being the most widely used blockchain, while TRON is second. This could be because of their lower transaction fees compared to other chains such as Ethereum or Bitcoin.

The Solana ecosystem has also experienced quite a shift. Jito, a liquid-staking solution, has overtaken Raydium, a decentralized exchange, as the protocol generating the most revenue. Over the past seven days, Jito has brought in nearly $600,000 in revenue, surpassing Raydium’s $510,000.

The change reflects the growing popularity of liquid staking, which has seen explosive growth in 2024, hitting a record $4.64 billion in July. Meanwhile, Raydium’s revenue took a hit from the decline in memecoin activity.

Finally, the stablecoin market cap in Solana also reached a new yearly high in July. This is primarily driven by USDC, which is responsible for two out of every three transactions in Solana. Nevertheless, Solana is not the go-to blockchain for stablecoins since it lags well behind Ethereum and TRON.

While TRON has a 50% dominance in USDT, Solana has only 0.68%. Looking at the same stats for USDC, Solana performs better at 6.62% but is not anywhere close to Ethereum at 67.74%.

Solana Price Prediction: What Does the Wave Count Say?

At the July lows, we predicted that the SOL price would soon reach a local bottom and flip, completing the D wave of a symmetrical triangle. The increase transpired as expected, and the price broke out from the symmetrical triangle pattern on July 19.

However, the breakout happened before the conclusion of the triangle, so it creates suspicion as to whether the triangle was the correct pattern. If it was, sub-waves D and E (yellow) were unusually short relative to sub-waves A, B, and C.

If this is the correct wave count, the price of SOL has started the fifth and final wave (white), which has its first target at $266 and its second at $360. The 1.61 and 2.61 external Fibonacci retracement levels create these targets. The sub-wave count for the bullish waves is in black.

The 2-day Solana price chart also provides an alternative in which Solana is still in wave four. The deviation above the May 20 high (white) supports this possibility, as such a movement often signals the top of sub-wave B (yellow). The price of SOL fell a lot in the next 24 hours after the deviation.

If this is the accurate count, the Solana price will decline until September, falling below the sub-wave A low of $108 (black icon). Then, it will begin the fifth and final wave that takes it above $200. A more accurate target can be determined once wave four ends.

To summarize, both wave counts predict another higher high before the end of the year. However, the bullish count suggests the fifth and final wave has started, while the bearish one predicts another decline below the July lows before the correction ends.

Solana Likely to See Another High but August Price Trend Unclear

The Solana blockchain dominates on-chain activity, as seen by its active user and transaction counts advantage. July was also quite positive for SOL as it approached its yearly highs. However, the subsequent sharp decline after reaching $194 in July 2024 raises concerns about whether the local bottom has been established.

While the long-term outlook suggests another peak is likely to occur, it remains uncertain whether the SOL price has already hit its local bottom.

About the Author

Valdrin Tahiri

Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.

He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.

Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.

He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.

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