Is Solana (SOL) a buy after losing 50% in May? Technicals are conflicting

YEREVAN (CoinChapter.com) – SOL, the in-house token of layer one platform Solana, was the biggest ‘loser’ in May 2022 after slashing its price in half. As a result, the SOL/USD exchange rate stood at just below $45 in the Asian-Pacific session on June 1.

Solana promises three-digit gains in the long-haul

Despite losing significant support at $79 early in May, the token flashed signs of a possible bias reversal. In detail, SOL formed a bullish setup named the Falling Wedge. The latter consists of two converging trendlines with a critical mid-range. They enclose the price action and gradually drive the value down.

However, the Falling Wedge is a bullish reversal pattern. Thus, it forecasts a breakout after the Solana token completes the formation by consecutively retesting both trendlines.

SOL price action rebounded from the lower trendline on May 28. However, traders are leaving the market, as evidenced by the lowering trading volumes. Thus, another support retest is likely in the works in the upcoming sessions.

Also read: Solana (SOL) crashed after the weekend rally – what to expect?

If the bullish scenario pans out, investors could expect a 350% profit in Q3-Q4 2022, as the Falling Wedge predicts an uptrend equal to the maximal distance between the trendlines. However, Solana remains dependent on Bitcoin (BTC) and the broader market conditions as an altcoin. Thus, it is advisable to consult the short-term predictors as well.

Four-hour chart

The lower time frame reading contradicted the long-term forecast. In detail, Solana token printed a Descending Triangle on the four-hour chart. The latter features a flat support line and a descending resistance that lowers the price swing by capping the bullish attempts.

The formation is a bearish continuation pattern. Thus, it predicts another leg down, pinpointing the target price at approximately $20, another 50% cut for Solana.

Also read: Crypto prices mirror stocks' rebound as executives buy the dip. 

Notably, neither of the described patterns is definitive, as broader market conditions should be taken into account. For example, Solana (SOL) slashed its price in half in the previous month, following the alpha crypto. However, if Bitcoin reverses its bearish trend, it might take the altcoins along for the ride.