Solana rises 7% to break 5-week downtrend as supply cuts loom

Solana rose 7 percent to $76.93 on Aug. 10, breaking a five-week descending channel as supply-cut proposals and institutional flows renewed demand.

The move followed growing validator support for two governance measures, with analyst Dami-Defi saying on X that "SOL just broke a five-week downtrend."

SOL first reclaimed $74.30 before piercing channel resistance near $75, then climbed to an intraday high of $77.36. Trading volume expanded during the breakout while the bull-bear power indicator rose to 1.23, and the Supertrend flipped below price to provide dynamic support at $75.02.

The nearest liquidation cluster sits at $77.80-$78.20, with a break above $78 opening a path toward $80 and then $82-$84. A daily close above $78 would confirm the reversal, while losing $74 would invalidate the breakout and reopen the route toward $72.80.

Supply-cut proposals and institutional flows drive the rally

The rally coincided with growing validator support for two proposals designed to reduce Solana's future supply growth. SIMD-0550 would double the annual disinflation rate to 30 percent from 15 percent, bringing the network toward its terminal inflation rate faster. SIMD-0553 would introduce resource-based transaction fees and could raise daily SOL burns from about 650 tokens to between 7,500 and 9,000. The formal governance process runs through Aug. 18, and both measures remain subject to validator approval.

Institutional developments added another source of demand. BlackRock's Daily Reinvestment Stablecoin Reserve Vehicle can record fund ownership across several public blockchains, including Solana, though the product holds cash, short-term U.S. Treasuries and repurchase agreements rather than SOL itself. Western Union's USDPT stablecoin is issued on Solana by federally regulated Anchorage Digital Bank, with a related Stablecard product launched across 37 markets in May.

SOL targets $78 liquidity before $80

The three-day liquidation heatmap shows the nearest concentration of leveraged positions around $77.80-$78.20, matching the next horizontal resistance on the 4-hour chart. A break above $78 could trigger short liquidations and open a move toward $80, with the next larger resistance between $82 and $84. Dami-Defi's chart projects a possible move toward $83 if SOL retests the broken trendline, while Michaël van de Poppe forecast a recovery toward $100-$120 after SOL formed a higher low against Bitcoin.

SOL's daily chart is improving but has not produced a fully confirmed bullish reversal. Price has moved above the Ichimoku conversion line at $74.89 and baseline at $74.73, and is attempting to clear the cloud's upper edge near $76.93. The Awesome Oscillator remains slightly negative at -0.46, with contracting red bars suggesting bearish momentum is fading. Large long-liquidation concentrations sit around $75.70, $75.10 and $72.80, so losing $75 could pull price toward $73.

The next network upgrade is the planned Alpenglow rollout, which aims to cut transaction finality from about 12.8 seconds to between 100 and 150 milliseconds, with staged implementation expected between August and October. For now, SOL's 4-hour breakout favors buyers while price holds above $75, but a daily close above $78 is needed to shift focus toward $80-$84. Losing $74 would place the breakout at risk and reopen the path toward $72.80.

This article is for informational purposes only and does not constitute investment advice.