Solana prices break through five-week downward trend, target the next target of $83?

Solana prices break through five-week decline channel, as supply reforms and institutional adoption boost demand

Solana (SOL) prices rebounded nearly 7% from their August 7 low, breaking through a five-week decline channel. The rise was driven by proposed supply reforms and increased institutional adoption, which has re-stimulated demand for SOL.

Market Overview

Solana prices rose from US$72.49 to US$77.36, breaking through a five-week downward channel. The four-hour Supertrend indicator has turned bullish, providing dynamic support at $75.02, strengthening the breakout structure. Clearing clusters near $78 and $80 may accelerate gains while buyers retain control. However, daily momentum remains mixed, with the US$74 to US$75 region being the main breakthrough failure range.

Solana prices break a five-week downtrend

Based on market data, Solana (SOL) traded around US$76.93 on August 10, up nearly 7% from the August 7 low of US$72.49. The rally allowed SOL to break out of the downward channel that has suppressed its prices since early July.

The 4-hour chart shows that SOL first recovered $74.30, and then broke through the channel around $75. The price then climbed to an intraday high of $77.36, where buyers encountered initial resistance.

During the breakthrough period, trading volume expanded, while the long-short power indicator rose to 1.23. A positive reading indicates that the buyer currently has greater short-term control than the seller. The Supertrend indicator has also shifted downward in the market and now provides dynamic support at $75.02. Staying above this level will keep the 4-hour structure bullish and could turn previous channel resistance into support.

Cryptocurrency analyst Dami-Defi pointed out the same structural change on his social platform, saying: "SOL has just broken through a five-week downward trend."

However, this breakthrough has not yet confirmed a broader trend reversal. SOL prices remain well below the band highs near $97 in May and the peak above $145 in January.

What are the factors driving SOL recovery?

The rally coincides with validators backing two proposals aimed at reducing Solana's future supply growth. Proposal SIMD-0550 would increase the annual inflation rate from 15% to 30%, allowing the network to reach its final inflation rate faster. Proposal SIMD-0553 would introduce resource-based transaction fees and potentially increase the daily SOL destruction volume from approximately 650 tokens to 7500 to 9000.

The formal governance process is expected to last until August 18. These proposals are still subject to validator approval, so their expected supply impact has not yet been assured. Solana's Governance Forum describes SIMD-0550 as doubling the rate of decline in inflation.

Developments at the institutional level have also added another source of demand. BlackRock recently launched its daily reinvestment stablecoin reserve tool, which can record fund ownership on multiple public blockchains, including Solana. The product holds cash, short-term U.S. Treasury bonds and repurchase agreements, not SOL itself.

Western Union has also expanded its use of the network. Its USDPT stablecoin is issued on Solana by federally regulated Anchorage Digital Bank, while a related Stablecard product has been launched in 37 markets. Western Union officially launched USDPT on Solana in May.

These developments do not directly require institutions to purchase SOL in large quantities. But they do strengthen Solana's positioning as a regulated fund and dollar payment infrastructure.

The SOL target looks towards $78, followed by $80 liquidity

The three-day clearing heat chart shows that the most concentrated leveraged positions are around $77.80 to $78.20. This region coincides with the next horizontal resistance level visible on the 4-hour chart.

A breakthrough of $78 could trigger another round of short liquidations and open up room for a move towards $80. The upper region of the front channel and band highs before July will see the next greater resistance between $82 and $84.

Analyst Dami-Defi's chart predicts that if SOL successfully retests the broken trend line, it may move towards $83. Analyst Michaël van de Poppe gave a more ambitious long-term outlook. In a market update on August 10, he said SOL had reached a higher low relative to Bitcoin and predicted a possible recovery to $100 to $120.

This goal requires SOL to regain several areas of resistance that are not yet visible in short-term breakthroughs. The top tests remain $78,$80 and $83.

Solana's daily chart still needs to confirm that

SOL's daily chart is improving, but a fully confirmed bullish reversal has not yet been formed. Prices have risen above the Ichiu equilibrium conversion line ($74.89) and the benchmark line ($74.73). SOL is also trying to break through the upper edge of the clouds (about $76.93), making the current region an important daily closing level.

Continued closing above the clouds will strengthen the reason to look in the US$80 to US$84 range. However, if it is blocked around $77, SOL may be sent back to test the Ichio balance cluster between $74.73 and $74.89. The momentum oscillation indicator is still slightly negative at-0.46. Its red bar chart has contracted and the indicator is moving towards the zero-axis, indicating that bearish momentum is weakening but has not yet fully reversed.

Clearing data strengthens the level of downside risks. A large number of long liquidations are concentrated around $75.70,$75.10 and $72.80. If SOL falls below $75, a forced sell-off could pull the price towards $73 before the buyer can regain control.

U.S. dynamics remain a key catalyst for SOL

Solana's institutional adoption has become increasingly associated with regulated U.S. financial infrastructure. BlackRock's fund structure involves tokenized ownership of treasury backed assets, while Western Union's USDPT is issued by a U.S. federally chartered crypto bank.

The next catalyst for the network is the planned Alpenglow upgrade. The upgrade aims to shorten the final confirmation time of a transaction from approximately 12.8 seconds to 100 to 150 milliseconds. If testing proceeds as planned, implementation is expected to be completed in stages between August and October.

Currently, as long as prices remain above $75, SOL's four-hour breakout benefits buyers. A daily close above $78 would provide a stronger confirmation signal and shift the focus to the $80 to $84 range. Losing $74 would put a breakthrough at risk and reopen the path to $72.80.