Solana’s weekend bounce risks turning into a bull trap — Can SOL price fall to $60 next?

XRP

A rebound move witnessed in the Solana (SOL) market this weekend exhausted midway as its price dropped below the $90 level from a high of $96 on Feb. 21. In doing so, SOL price technicals are now risking a classic bearish reversal setup.

Solana price risks dropping to $60

Dubbed head-and-shoulders (H&S), the technical pattern emerges when the price forms three peaks in a row atop a common support level (called neckline). As it typically turns out, the pattern’s middle peak, called “head,” comes longer than the other two peaks, called left and right shoulders, which come to be of similar heights. 

The H&S pattern tends to send the prices lower—at length equal to the maximum distance between the head and the neckline—once they decisively break below its neckline. As a result, Solana, which has been forming a similar technical structure lately, risks sliding toward $60, or almost 30%.

Interestingly, the H&S downside target, near $60, was also instrumental as support in August 2021, right before Solana’s price rally to its record high above $250.

Bear flag increases downside risks

The risks of Solana undergoing a period of another major selloff have been also increasing due to a technical pattern called a “bear flag.”

Related: Bottom ahead? Solana paints its first ‘death cross’ as SOL losses 50% in January

Notably, SOL’s price has been breaking out of the bearish continuation setup. In doing so, it now risks falling by as much as the length of its previous downtrend, called “flagpole,” when measured from the point of breakout, as shown in the chart below.

As a result, SOL’s bear flag breakout risks sending its price to $60 or lower, like the H&S pattern.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Articles You May Like

Ripple Vs. SEC Update: Here’s Why Today Is Incredibly Important To The Lawsuit
Ripple Vs. SEC Lawsuit: Latest Filing Marks Beginning Of The End Of Historic Battle
Ethereum Undergoes Major Breakout, Path To New All-Time High?
When Spot Ethereum ETFs Go Live ‘Expect A Bloodbath’, Says Expert
Ethereum Bullish Turn: Analyst Highlight Positive Bias In ETH Options Across All Expiries