New Bearish Pattern Puts Solana Coin Price At A Risk of 16% fall

The last two-week recovery in Solana coin price has shaped into a falling wedge pattern. During the pattern formation, the asset price rallies between two converging trendlines, awaiting the most common outcome of support trendline breakdown. In theory, the converging trendlines are a sign of weakening bullish momentum, which eventually leads to a direction downfall. Thus, here’s how this pattern may influence the near future price of Solana.

Key Points

• A breakdown below the rising wedge pattern’s support trendline could tumble the SOL price by 14.5%
• The ongoing bullish rally will continue until the pattern support trendline is intact.
• The 24-hour trading volume in the Solana coin is $1.4 Billion, indicating a 205% gain.

Source-Tradingview

Amid the recent recovery, the Solana coin price witnessed an explosive rally in the first two weeks of 2023, This sharp price jump made sense as the coin was already in oversold sentiment due to the bloodbath caused during the FTX crypto exchange crash. 

Thus, from a January low of $9.69, the Solana price rallied 172% to reach a high supply zone of $27. However, with the spreading uncertainty in the crypto market, the last two weeks’ recovery was less aggressive and showed the formation of a rising wedge pattern. 

By the press time, the coin price traded at $24.15 and was down 7.5% on intraday. With today’s long bearish candle, the coin price tried to pierce the pattern’s support trendline and trigger a new correction phase.

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A daily candle closing below the lower trendline will accelerate the selling pressure and most likely dump the SOL price 16% down to revisit the $20.4 or $17.7 support.

However, this pullback could eventually recuperate the bullish momentum for a long-term rally.

Technical Indicator

Moving Average Convergence/Divergence: a bearish crossover between the MACD(blue) and signal line(orange) signals the exhausted bullish momentum and higher change of potential retracement.

EMAs: the 50-and-100-day EMA wavering near the $20.4 mark increases the support strength of this level

Solana Coin Price Intraday Level

• Spot price: $24.1
• Trend: Bearish
• Volatility: Medium
• Resistance levels: $27.6 and $30.5
• Support levels: $20.4 and $17.8