Solana (SOL) fell on May 26, continuing its decline from the previous day amid a broader recession in the cryptocurrency market.
Banner Breakdown Current SOL Price
The price of SOL fell more than 13% to about $ 41.60, its lowest level in almost two weeks. In particular, the SOL / USD pair also broke out what looks like a “bearish pennant,” a classic technical pattern whose appearance is usually preceded by further bearish movements in a market.
In detail, bearish pennants are seen when a price is trading within a range defined by downward trend resistance and upward trend support.
These patterns after a price break reverse the lower trend, accompanied by higher volumes. According to the rule of technical analysis, traders decide on the profit target of the flag after adding the lower leg length of the previous one (known as the “flag pole”) to the breaking point.
SOL suffered a similar pause after closing below its pennant lower trend on May 25, as seen below. In theory, Solana’s profit target is close to $ 23, down 45% from the May 26 price.
However, a bearish SOL pen breakout was not accompanied by a spike in trade volumes, suggesting that traders are not fully sold on the move. This may prompt the signal to repeat the bottom trendline of the pen as a resistance.
In addition, the bearish penny set risks being invalidated if the trend line and the 20-day exponential moving average (20-day EMA; green wave) near $ 57.59 succeeds as the next target .
Conversely, the withdrawal of SOL’s profit target could hold close to $ 23, with $ 35.50 – the low level on May 12 that preceded a strong rebound – as interim support.
Confluence Solana price support
SOL is also trading near a support confluence, which includes multi-month horizontal and upward trend lines.
The horizontal trendline near $ 45.75 acted as a resistance during the April-August 2021 session and then turned into support between January 2022 and March 2022. Meanwhile, the upward trend is limiting SOL’s extended bearish efforts from March 2021.
See also: Assuming bitcoin plays as well, longer time frame analysis shows $ 90 price for Solana (SOL)
As the two trends converge, they could become a psychological entry point for investors with a long-term bullish outlook. This would mean that SOL would bounce back towards its next target near $ 79, which is in line with multi – month downward trend resistance.
On the other hand, a continued decline in the Solana SOL market would jeopardize another massive decline, as shown in the bearish pennant pattern above.
The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of Cointelegraph.com. All investments and transactions involve risk, you should do your own research before making a decision.
