SOL Price Crashes 18%, On-chain Metrics Remain Bullish: $200 Retest Soon?
Solana price and the broader market took a significant dip mid-week. In addition to the bearish crypto market conditions, the accelerated sell pressure can be attributed to geopolitical tension between Iran and Israel, which created FUD among market participants. Despite the 18% crash this week, the SOL price is positioned at crucial support, eyeing reversal, supported by on-chain growth.
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SOL Price Preparing for Post-Correction Rally
Last month, SOL price noted a 60% recovery, pushing it from $121 to $193.8. This uptick assisted the altcoin to reclaim 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs) at $160, $154, and $140, respectively.
Amid this recovery, SOL buyers escaped a four-month consolidation as the price breached the triangle pattern resistance on July 19th. This chart pattern, characterized by two converging trend lines, is known to squeeze the asset price into a narrow range before releasing the buildup momentum for the directional rally.
Solana price currently trades at $164.5, which is just above the 50-day and 100-day EMA support confluence at $160. Furthermore, SOL is also retesting the aforementioned triangle’s upper trendline, serving as a foothold. If buyers step in, it could trigger a potential recovery rally.
In such a case, the SOL price forecast a rally that revisits $210, followed by $260.
The bullish on-chain data supports this positive outlook for SOL. The number of new addresses interacting with the Solana network has consistently increased since May 2024. On August 1st, the number of New Addresses metrics surpassed a significant milestone of 1.25 million.
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Furthermore, the number of active addresses hovers above the 2 million mark despite the recent bearish developments surrounding Solana price.
All in all, the sustained growth in new and active addresses implies strong user engagement and adoption for Solana price. These massively bullish fundamentals support a further uptrend for SOL price.
On the contrary, if the Solana price breaches the $160 support level on the daily time frame, it would attract sell pressure, opening up the altcoin for a further decline. Such a development could see SOL invalidate the aforementioned bullish thesis and trigger a 24% crash to the next support level at $130.
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