Solana At Risk Of Breakdown After Key Rejection – Is $100 Next?

Overview

Solana (SOL) is currently facing significant market challenges, trading well below its all-time high and struggling to maintain crucial support levels. Recent price movements and technical patterns have raised concerns among analysts regarding a potential breakdown, which could lead to further declines.

Recent Price Movements

On Sunday, Solana experienced an 8% pullback, reaching a two-week low of $130. This decline is particularly concerning as the cryptocurrency has been unable to hold above the psychological $200 barrier since late October. Over the past three months, SOL has fluctuated between the $115 and $145 range, indicating a lack of bullish momentum.

Earlier in the year, Solana had shown promising signs by breaking out of a multi-month downtrend and briefly surpassing the critical $145 resistance level. However, the recent market pullback has pushed the price back below these important thresholds. According to market observer BitGuru, the cryptocurrency has just swept liquidity into a strong demand zone following what he describes as a “clean structure breakdown.” BitGuru noted that if Solana can rebound from its current local support area, it might trigger a relief move towards previous highs.

In addition, analyst Man of Bitcoin highlighted that Solana’s price has broken below a two-week ascending trendline, which had supported a 17% surge since the beginning of the year. The price also fell below the $136 mark, a level where it had previously found consistent support. The analyst indicated that short-term support for Solana lies between the $129 and $136 range, warning that a sustained breakdown below this area could lead to further complications for the cryptocurrency.

Technical Analysis and Patterns

Several analysts have pointed out a concerning macro pattern on Solana’s chart, specifically a two-year Head and Shoulders formation visible on the weekly timeframe. This bearish pattern has been developing since 2024, with the left shoulder forming during the Q1-Q2 rally of that year. The head was created during the bullish run that led to Solana’s all-time high of $293, while the right shoulder emerged following the Q3 rally and subsequent Q4 correction.

Trader Slashology expressed a negative outlook, stating that Solana looks precarious at its current levels, particularly near the neckline of the Head and Shoulders pattern, which sits around the $120 area. He cautioned that a breakdown from this critical level could result in a significant decline of 35% to 40%. Conversely, market observer Crypto Curb provided a contrasting perspective, suggesting that Solana’s trajectory could mirror the S&P 500’s price action from 2009 to 2011. He posited that Solana could invalidate the bearish pattern if it bounces from the neckline and surpasses the peak of the right shoulder.

From author

The situation surrounding Solana reflects the broader volatility present in the cryptocurrency market. As analysts present differing views on potential outcomes, it is evident that investor sentiment is fraught with uncertainty. The technical patterns emerging in Solana’s price chart warrant close observation, as they could significantly influence trading strategies moving forward.

Impact on the crypto market

• Solana’s inability to maintain support levels could lead to increased selling pressure, affecting overall market sentiment.
• The potential for a breakout or breakdown from key technical patterns could influence trading behaviors among investors.
• A significant decline in Solana’s price may cause ripple effects across other altcoins, particularly those correlated with its performance.
• Analysts’ differing predictions highlight the uncertainty in market dynamics, which may lead to increased volatility in the short term.
• Continued monitoring of Solana’s price action will be essential for investors looking to navigate the current market landscape effectively.