Like many altcoins in the market, the price of Solana (SOL) has surged over the past 24 hours. This is a positive development for the token, which has increased by 13% over the past seven days.
However, on-chain indicators suggest that this rally could be short-lived.
A huge warning for the Solana bulls
At press time, SOL’s price sits at $158, marking its highest point since August 11. Despite this surge, Solana’s social dominance has declined.
Social dominance measures the attention a cryptocurrency receives relative to others. A high percentage suggests an increase in discussions around Solana, which may be key to maintaining its upward momentum.
However, SOL’s social dominance decreased from 4.50% on August 19 to 2.58%. This decline suggests that the market’s enthusiasm for the token may be fading.
If social dominance continues to decline, SOL’s rise could lose momentum. In the worst case, its price could fall much lower than the gains it has seen in recent days.
As we saw above, whenever social dominance decreases during an uptrend, the uptrend usually stops. If history repeats itself, SOL could be headed for a decline.
In addition to social dominance, Solana’s weighted sentiment has also turned negative. According to Santiment, this metric tracks the overall sentiment towards a cryptocurrency across social media platforms.
When sentiment is positive, social media comments tend to be optimistic. Conversely, negative sentiment reflects a pessimistic outlook, which is now the case with SOL.
Read more: Solana vs. Ethereum: An Ultimate Comparison
This shift in sentiment suggests that despite recent price increases, market participants may be losing confidence in sustainable growth.
SOL Price Prediction: Mixed Signals on Different Charts
According to the daily chart, SOL price could face resistance at the higher interest points around $163.93.
If the token’s uptrend is rejected at this point, it could experience a drawdown, potentially dropping to $150.84. In this region, the bulls seem to have formed a strong support system that could prevent a further downturn.
Meanwhile, on the 4-hour chart, SOL price has formed a bullish Adam and Eve pattern. This pattern takes the form of a V-shaped bottom (Adam) followed by a U-shaped consolidation period, signaling the start of a new uptrend.
As shown below, SOL price has broken above the neckline of the technical pattern. If this uptrend continues, the bearish bias analyzed on the daily chart could be invalidated.
Read More: 13 Best Solana (SOL) Wallets to Consider in August 2024
More specifically, a continued uptick could see the token increase by 10% to $172.83. In a very bullish scenario, Solana’s native token could reach $187.33.
Disclaimer
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