Solana’s price is just one step away from a 40% drop in June

Solana's price is just one step away from a 40% drop in June

Solana (SOL) is nearing a decisive break as it approaches the peak of its dominant “descending triangle” pattern.

Implement the 40% reduction in the price of SOL

In particular, the price of SOL is condensed within a range defined by downward trend resistance and horizontal trend support, which is similar to a descending triangle – a trend-following pattern.

So, since SOL has a lower trend, about 85% from the high of $ 267 reached in November 2021, it is more likely to break below the triangle range.

According to the rule of technical analysis, the fracture movement and formation of a descending triangle can continue until the price has fallen as high as the height of the triangle. This poses a bearish SOL price target at $ 22.50 in June, about a 40% reduction on today’s price.

SOL / USD daily chart with broken “descending triangle” pattern. Source: Trade View

But not all descending triangles break, a study at the Samurai Academy of Commerce recommends. In particular, the probability of a descending triangle pattern achieving its profit target is 7 out of 10, based on the history of the pattern.

So that gives SOL a 30% chance of avoiding a break and bouncing back.

Solana Reversal Case

Descending triangles that form during downtrends but still lead to price reversals usually mark the bottom of the asset down cycle.

Suppose the SOL is holding above the horizontal trend support of the triangle. The SOL / USD pair could then break above the downward trend resistance of the structure, and rise to its maximum height, pushing its upside target at around $ 65, up 72% compared to the day’s price today.

SOL / USD daily chart with descending triangle reversal pattern. Source: Trade View

The bullish profit target of the descending triangle also comes with a 50 – day SOL (50-day EMA; red wave) exponential moving average, located near $ 59.

Separately, the SOL Relative Strength Index (RSI), which has broken out of its oversold threshold of 30 from May 12, strengthens an upside view of the signal.

SOL It could go up, it could go down. great analysis bruh – Posty (@PostyXBT) June 10, 2022

Solana TVL drops 75% from the peak

Meanwhile, Solana’s origins are mixed.

As a blockchain network, it has performed poorly over the past few months due to persistent outages. While Total Locked Value (TVL) within Solana’s smart contracts fell to $ 3.69 billion, it fell 75% from a record high of December of $ 14.83 billion 2021, according to data from Defi Llama.

Solana TVL performance history. Source: Lama Challenge

According to a study by James Trautman, a researcher at Messari, a US cryptocurrency analyst firm, Solana has seen sustained growth in network usage, developer activity, network infrastructure, and the entire ecosystem in the first quarter of 2022.


“A number of factors contributed to the first quarter results, including the continued growth of new NFTs and NFT markets, TVL diversification, UX enhancements, and new applications in a number of industries outside DeFi.”

Read also: Should you buy Solana when the price of SOL is at its lowest level in 10 months and has dropped 85% since it peaked?

On June 8, Solana’s venture capital arm launched a $ 100 million investment fund and grant to support its blockchain-based products in South Korea, a country struggling with the cryptocurrency industry. project.

This move should attract developers who are willing to move their projects from Terra to Solana, which could lead to increased demand for SOL.

The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of All investments and transactions involve risk. You should do your own research before making a decision.

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