Solana (SOL) Price Forecast: September Correction Looming?
Solana Price Faces Potential September Headwinds
Solana (SOL) experienced a volatile August, struggling to maintain levels above $210 and ultimately trading around $205 at press time. This represents a 4.5% decrease over the last 24 hours and a 1% dip over the past week. While monthly gains remain above 13%, and the yearly trend is still positive at nearly 50%, several factors suggest that September could present significant challenges to this uptrend.
Key Indicators Point to SOL Weakness
Supply in Profit Signals Correction Risk
A crucial metric to watch is the percentage of SOL supply currently in profit. This indicator, which measures the number of coins worth more than their cost basis, reached a six-month high of 96.56% on August 28th before slightly decreasing to approximately 90%. Historically, such highs have often preceded price corrections.
Previous instances include:
- July 13th: The metric hit 96%, with SOL trading around $205, followed by a 23% drop to $158.
- August 13th: A peak of 94.31% triggered a 12% correction from $201 to $176.
- August 23rd: Another peak at 95.13% resulted in an 8% slide from $204 to $187.
With this metric again nearing record highs, the risk of a more substantial correction in SOL's price this September is elevated. For developers building on Solana and DeFi platforms that rely on SOL price stability, understanding these indicators is critical. Codeum provides security audits that can help assess the overall stability of your smart contracts during periods of market volatility.
Exchange Balances Indicate Potential Selling Pressure
Reinforcing the risk of a sell-off is the increase in SOL held on centralized exchanges. Balances surged to over 32 million tokens on August 28th, up from under 30 million earlier in the month. A rise in exchange balances typically suggests that holders are preparing to sell their holdings.
A similar pattern emerged on August 14th, when balances exceeded 32 million, and the Solana price subsequently fell by 8% within days, from $192 to $176. This correlation highlights the potential downside pressure that could impact SOL's price in the coming weeks.
Bearish Technical Pattern Emerges
Technical analysis further supports a bearish outlook. The weekly chart shows Solana moving within an ascending wedge pattern. This pattern often signals weakening momentum and can result in either a bearish continuation or a reversal.
Key levels to watch:
- Losing $195 and $182 could lead to a decline towards $160, representing a potential 15–20% pullback.
- A break below $182 would validate the bearish pattern breakdown.
However, a weekly close above $217 (the recent local high) would negate the wedge's bearish implications and pave the way for higher price targets. Until then, the bias remains tilted downward.
Historical Performance vs. Current Indicators
Historically, September has been a positive month for Solana, with gains recorded since 2021. But current on-chain data and exchange balance suggest this year could be an exception. Unless SOL manages a decisive close above $217, its price may struggle, regardless of the positive impact of past performance or positive news.