How to identify Solana price bullish reversal signs
- Solana price may encounter increased volatility this weekend after flaunting numerous buy signals.
- The recent multimillion-dollar hack on Solana’s digital wallets appears to have had only a minor impact on SOL price.
- Solana price will likely stretch its bullish leg 11.92% to $44.42 following a falling wedge pattern breakout.
Solana price firmly held to slightly higher support to curb declines witnessed this week compared to July’s primary anchor at $35.00. The smart contracts token suffered a significant hack attack early Wednesday, eliciting a lot of negative sentiment and short selling. However, Solana price appears to have quickly come out of the spiral from $46.67 to its most recent buyer congestion at $38.00.
Solana price quickly moves on from Wednesday’s multimillion hack
On Wednesday, many investors suffered pain and disappointment when an unknown hacker took about $5 million in SOL, SPL, and other Solana-based tokens from digital wallets like Phantom.
The hacker targeted digital wallets and alerted the crypto community to the security of tokens stored on such platforms. Some investors take short positions in SOL with the intention of buying the token later at a lower price. Most likely, these are the same traders who pushed up the price of Solana after it received support at $35.00.
Santiment’s Social Volume metric below shows additional mentions and discussions about SOL between August 1st and August 4th. Investors are resilient, so they remain relatively undisturbed by such events. In the past, hacks and exploits often resulted in double-digit losses. However, this hack does not sit well with the smart contract platform that hopes to topple the giant Ethereum.
As the community moves away from the hack, Solana’s price represents important signals of strength. For example, the moving average convergence divergence (MACD) on the four-hour chart prompts buyers to double their efforts when the 12-day exponential moving average (EMA) crosses the 26-day EMA.
Traders will also appreciate the 11.92% rally from the descending wedge pattern as seen on the 4-hour chart. This pattern is formed after a significant upward price movement followed by a bearish correction. A period of consolidation crowns the pattern before an upward breakout that matches the distance between the widest points of the wedge.
It is worth noting that a recovery from $44.42 is not guaranteed, hence the need for traders to consider taking profits at $42.00. Some of the obstacles Solana price will have to face as it climbs 11.92% to the north are the 100-day Simple Moving Average (SMA) and the 50-day SMA, which could delay or sabotage the expected strength.