Perhaps Solana’s blockchain is now used to the mishaps that seem to happen every now and then. This week, there were reports that SOL addresses have been hacked. However, investigations revealed that the exploit was external and not network fault. Fortunately, the incident did not have a significant impact on the price movement of SOL.
Now, even though the recent incident didn’t lead to panic selling, SOL still had some downsides. The altcoin is down nearly 16% from end-July levels. This bounce appears to be in line with the performance of the cryptocurrency market over the same period.
Some breathing room for the bulls
SOL has managed to post a 7% increase over the past two days, confirming that it can still get healthy demand. The upward trend came after the price action almost touched the ascending support line.
Despite the recent rally, SOL investors should move with caution. The recent rally has been marked by low buying volume, which explains the limited upside. Moreover, the recent bearish pressure earlier in the week pushed it below the 50% RSI level. This confirmed the weak bullish price channel since SOL price hit the bottom.
Interestingly, SOL has also shown resilience to downside resistance. The recent uptrend was the second time it pivoted without much interaction with the support line. Investors may take this as a bullish sign.
This would explain why sentiment has favored the bulls in the last couple of days. The change in sentiment was seen in the Binance Funding Rate and the DyDx Funding Exchange Rate.
Solana developers have been very active over the past two weeks as revealed by the development activity bar. This could be another reason for investor confidence to improve slightly.
However, nothing attracts investors more than a healthy network, which has strong activity and organic demand.
Solana saw strong growth in NFT trade volumes in July. While these volumes decreased significantly after the middle of the month, they maintained healthy levels nonetheless.
Although Solana is currently dominated by the bulls, sooner or later the price will abandon the current channel. This would be equal to a group rearrangement, which means the short-term outlook remains challenging.