- Solana saw a bullish break from the descending wedge.
- That alt may dip towards the $4.45 lows.
- Solana witnessed its development activity plunging steadily throughout 2022.
Solana appears prepared for a massive rise following the FTX debacle. While publishing this blog, SOL traded near $14.09, climbing from November 22 at $11. Unfortunately, the alternative token could not have outshined the recent adversity in the longer term. The patterned breakout means the alt could soar to $17.59 as it overcomes a falling wedge.
Nevertheless, SOL currently lacks adequate buying pressure for strengthened uptrends. Furthermore, a steady development activity plunge may thwart substantial buying momentum. Thus, Solana might dip into its support zones of $5.68 & $4.45 following a fake upside breakout.
Solana Breached News Supports
SOL witnessed a rapid rally in June – August, printing a multi-month climbing wedge. Remember, climbing wedge setups are bearish, as downtrends likely follow. Solana’s downtrend following the rising wedge saw the price adhering to a parallel channel.
Nevertheless, the FTX crisis and Solana’s substantial exposure triggered further dips, breaching some support regions. Meantime, $11.02 has remained a solid bulls’ floor lately. SOL’s price action since November 10 has created a declining wedge pattern that’s bullish.
Nevertheless, SOL might dip as the market structure flashes bearishness. The OBV (on balance volume) is yet to rise to match the parallel channel. Therefore, there isn’t enough buying momentum to push Solana bulls forward.
Also, the RSI (Relative Strength Index) retreated within the oversold region but experienced a dip toward that zone. That shows sellers had an impact, regardless of the easing strength. Thus, SOL might breach its current support, welcoming a deep cut to $4.45 in the upcoming months or weeks.
Nevertheless, a closing beyond the 23.6% Fibonacci mark might cancel this narrative – a case that might see SOL targeting the 38.2% Fibonacci mark at $21.66.
Declined TVL and Development Activity
Santiment revealed that Solana’s development maintained free fall through 2022. The slump corresponded with SOL’s falling prices. SOL’s TVL (total value locked) across decentralized finance platforms plunged within the year.
DeFiLlama confirmed Solana’s TVL plunged from $5B in January to press time at $280 million. Development activity might impact SOL’s longer-term prices. Thus, longer-term holders should assess the asset’s development activity and Bitcoin’s performance.