FUNDAMENTAL OVERVIEW
Solana has come under some
pressure this week following the failed cloture vote on the Clarity Act and the
risk-off sentiment triggered by yesterday’s Fed rate hike. The cryptocurrency erased
most of its losses as the market came back to senses and realised the FOMC decision
wasn’t more hawkish than expected.
IDIOSYNCRATIC CATALYSTS
Looking ahead, the most important idiosyncratic catalyst is the Solana’s
Alpenglow consensus upgrade which is designed to replace TowerBFT and reduce
finality from roughly 12.8 seconds to around 150 milliseconds. The Solana
Foundation says the rollout is occurring in phases and it’s one of the largest
protocol upgrades in Solana’s history.
Current event calendars point to late September/October for activation,
although the exact timing has some uncertainty. The market may start
positioning before activation. A successful activation may then trigger a “sell
the fact” reaction, while delays, bugs or disappointing performance could lead
to a selloff in the short-term.
SYSTEMATIC CATALYSTS
On the macro side, I
would carefully watch the situation in the Middle East as $100 oil, rate hikes
and elevated bond yields might put more pressure on Trump to end the war. Look
for signs of de-escalation as that’s going to weigh on oil prices.
Oil has been the
main driver of pretty much all other markets given its influence on inflation
and interest rate expectations. Lower oil prices would trigger a dovish
repricing and support risk sentiment and the crypto market. Of course, the
opposite is true if things escalate further.
Watch also the
economic data. When the market pricing and expectations get overstretched, it
doesn’t take much to see a strong reversal. If the data starts surprising to
the downside and pointing to slowing economic activity, the aggressive rate
hike bets will likely get pared back and give solana a boost.
SOLANA
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we
can see that Solanais trading at the key support zone around the 97.00 level.
The buyers will likely step in around the support with a defined risk below it
to position for a rally into the 148.00 level. The sellers, on the other hand,
will look for a break lower to pile in for a drop into the major trendline around
the 82.00 level next.
SOLANA TECHNICAL ANALYSIS – 4
HOUR TIMEFRAME
On the 4 hour chart, we
have a falling channel defining the price action that could turn into a bullish
flag if the price breaks above the top trendline. If we get a pullback into the
top trendline, we can expect the sellers to lean on it with a defined risk
above it to position for a drop into the lower bound of the channel. The
buyers, on the other hand, will want to see the price breaking higher to
increase the bullish bets into the 148.00 level next.
SOLANA TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as from a risk management perspective, the buyers will
have better risk to reward setups around the support, the lower bound of the channel
and on a break above the top trendline. The sellers, on the other hand, will
wait for the price to pull back into the top trendline or break below the
support to pile in for new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Todaywe get the US Jobless Claims figures, but traders will keep a close eye
on the developments in the Middle East.
This article was written by Giuseppe Dellamotta at investinglive.com.