- If a descending triangle is confirmed, Solana’s downturn could gain traction.
- To maintain the rally, SOL must return above $50.
- The Supertrend indicator and the DMI support the bearish view.
Solana (SOL) seemed to be having trouble recovering after buyers hit a huge supply barrier as $40 got closer. At the time this was written, SOL was back to $38. If a descending triangle pattern is taken into account, it is likely that the downtrend will continue in the next session.
Solana Stares Into Depth, Suffering 42% Losses
The x-axis of a descending triangle is recently strengthened support at $39 in SOL, producing the point of a falling triangle. As seen on the daily chart (below), the dropping trendline drove Solana’s price lower. A breach of the aforementioned support would likely result in a 42 percent decline to $22 for the “Ethereum killer” token. Descending triangles are extremely bearish and have precise breakout goals equal to the distance between the triangle’s highest and lowest points.
The same chart highlighted the psychological level of $50, which prevented a fast price comeback for Solana. In addition, the Direction Movement Index (DMI) indicated that the bears’ hold on SOL remained strong.
In addition, the position of the Supertrend signal above the token, as depicted by the 12-hour chart (below), suggested the bears’ dominance in the coming days. This measure, like the moving averages, is superimposed on the chart and follows the SOL’s trend. It includes the average true range (ATR) in its computations, which aids in determining market volatility. Bulls were likely to be on the receiving end as long as the index remained red and above the price.
A daily closing above the triangle’s horizontal trendline at $39 would indicate buyer strength in the Solana stock. This would help the token approach the 50-day simple moving average (SMA) close to the psychological $50 level. If Solana’s price surpasses this level, it might surge to the $73 range high.
Disclaimer: The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. Please do your own research.