Solana (SOL) dropped on May 26, continuing its decline from the previous day amid a broader retreat across the crypto market.
SOL price pennant breakdown underway
SOL price fell by over 13% to around $41.60, its lowest level in almost two weeks. Notably, the SOL/USD pair also broke out of what appears to be like a “bear pennant,” a classic technical pattern whose occurrences typically precede additional downside moves in a market.
In detail, bear pennants appear when the price trades inside a range defined by a falling trendline resistance and rising trendline support.
These patterns resolve after the price breaks below the lower trendline, accompanied by higher volumes. As a rule of technical analysis, traders decide the pennant’s profit target after adding the length of the prior’s leg lower (called “flagpole”) to the breakdown point.
SOL has been undergoing a similar breakdown after closing below its pennant’s lower trendline on May 25, as shown below. In theory, Solana’s profit target comes to be near $23, down about 45% from May 26’s price.
Solana price support confluence
SOL also trades near a support confluence, comprising multi-month horizontal and rising trendlines.
Susiję: Darant prielaidą, kad „Bitcoin“ groja gražiai, ilgesnio laiko tarpo analizė rodo, kad Solana (SOL) kaina yra 90 USD
As the two trendlines converge, they could become a psychological entry point for investors with a long-term upside outlook. That would mean SOL rebounding towards its next upside target near $79, which also coincides with a multi-month falling trendline resistance.
On the other hand, a continued selloff in the Solana market would have SOL risk another massive decline, as discussed in the bear pennant setup above.
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Source: https://cointelegraph.com/news/spooky-solana-breakdown-begins-with-sol-price-facing-a-potential-45-drop-here-s-why