Solana's Bullish Breakout Hindered by Ethereum Scam Risks

In my view, Solana (SOL) is demonstrating signs of a potential technical rebound, with a recent 1% increase to $187.43 following a TD Sequential buy signal at $178. This indicator is a popular tool for spotting trend reversals, and its appearance has reinvigorated bullish sentiment among me and other traders, especially as SOL consolidates above the crucial $180 support level. Looking at the 4-hour chart, I observe that bearish momentum appears to be waning, reflected by smaller candlesticks and weakened selling pressure—early signs that a reversal could be on the horizon. The appearance of a green arrow under the last bearish candle, confirmed by a black arrow, further supports the possibility of an upward move. SOL's pattern of forming higher lows suggests accumulating strength, which could prepare it for a breakout towards the $188–$190 resistance zone. However, I am cautious because external factors such as security concerns in the crypto ecosystem could challenge this optimistic outlook. Reports of Ethereum-based scams exploiting Solana’s infrastructure have raised community alarm, and some data points, like a 16% decline in active addresses and an 8% drop in DeFi TVL, indicate a cooling period after July's robust performance. The high liquidity and trading volume in July point to previous enthusiasm, yet recent signs of engagement decline suggest a need for careful monitoring. Despite these challenges, the technical setup remains compelling. SOL is currently holding support near the 20-day EMA at $178, with rising retail long positions and increasing open interest indicating trader confidence in a possible breakout. If SOL can close above $190 and maintain momentum, it could reinforce a bullish trend. Nonetheless, Ethereum-based scams threaten to undermine trust, and I believe traders should stay vigilant. The upcoming trading sessions will be critical—either confirming a bullish breakout or signaling a pullback driven by broader market distrust. In conclusion, I see a cautiously optimistic outlook for Solana, supported by favorable technical signals, but tempered by ongoing security concerns and declining on-chain engagement. It’s essential to weigh these factors carefully before making trading decisions.