Solana (SOL) has been recovering over the past week while being buffeted by the general market weakness. The Solana price action and large money transactions indicate that market sentiment might again turn positive towards the cryptocurrency. At press time, SOL was trading at $144, a 1.31% surge from the intra-day low.

SOL/USD (source: CoinMarketCap)

Whale Transactions Indicate Increased Investor Interest

The latest on-chain data points toward major activity with large investors in the cryptocurrency space. On 22 August, two major holders moved off Binance 56,245 SOL tokens worth $8 million at current prices. One of the addresses sent 30,000 SOL, and the other moved 26,245 SOL, which means a significant investment has been made in the current market scenario.

Transactions like these suggest big investors are utilizing what they feel are opportune moments to buy into the market. Whales’ accumulation of the SOL token often indicates their confident future for that asset’s performance and that it will increase in price, mirroring the positive market sentiment.

Further supporting this sentiment, Santiment observed whale stablecoin holdings in a phase with the trend dynamics of SOL’s prices. The trending phases where the accumulation of stablecoins increased indicated that such investors were positioning themselves in preparation for a future market trend.

Technical Indicators Suggest Potential Bullish Reversal

A look at Solana’s technical metrics suggests a possible shift in bullish trends around current prices. The Relative Strength Index (RSI) reads 54.94 and resides in a neutral area. Such a reading hints that the balance between buyers and sellers is perfect for allowing the price to move upward without any immediate concern for overbuying the asset.

The Moving Average Convergence Divergence (MACD) indicator now shows slight convergence under the zero line. Should that trend extend, it would be reflecting a decrease in the intensity of bearish momentum and could hint toward a change over to bullish domination.

Additionally, the Awesome Oscillator remains placed at its value at 0.74 but with weakening red bars, which shows a decrease in bearish pressure but again supports the upside move. These technicals indicate that Solana might be set up for recovery.

Falling Wedge Pattern Points to Imminent Breakout

Chart analysis reveals that a falling wedge has been identified in Solana’s recent price action. A falling wedge is typified by converging trend lines resulting from progressively lower highs and lows. It usually signals accumulation in the middle of a downtrend and is often followed by upward breakouts.

Source: TradingView

Immediate support sits at $130 near the wedge base. A little lower is located at $110.55—a level corresponding to the price low before the wedge started to form. An upward breakout of the wedge’s upper trendline, currently near $145, could experience strong upside momentum.

In case of a breakout, the near-term target is for the pair to reach for the recent high at around $155. Surpassing this level and landing it might set the stage for Solana to test resistance levels towards $170, per a target derived from the broadest part of the pattern added to the breakout point.

Derivatives Market Presents Mixed Signals

The derivatives market for Solana gives a mix of bullish and bearish signals. Trading volume has dropped by 37.43%, settling at $3.62 billion. This could indicate either a period of consolidation or a slight retreat in trading activity by market participants.

Source: Coinglass

On the other hand, open interest in the Derivatives Solana rose by 1.55% to $2.13 billion. An increase in open interest means more new positions are generated at that time, and it shows potential interest and expectation of the price move.