Solana’s relief rally could fizzle anytime — SOL price could drop over 40%

NEW DELHI (CoinChapter.com) — Solana (SOL) has been moving inside a bearish technical pattern, dubbed the “bear flag,” and therefore eyes a run-down to $20 by late July.

In detail, a bear flag forms when the price chart a sharp countertrend (the flag) after a downtrend (the flagpole). It typically results in the price breaking below the lower trendline, which, if accompanied by a rise in trading volumes, could drop by as much as the flagpole’s height.

As a result, SOL prices face a fall to $20, a nearly 43% drop from current prices.

Also Read: Solana’s Solend fiasco is a good opportunity to accumulate SOL tokens — analyst.

Solana prices reached $42.6, Jun 25’s intraday high, in 12 days, a jump of 64% from Jun 14’s low of $26. However, traders began selling on Sunday, which resulted in SOL falling 19% between Jun 26’s high of $42.4 and Jun 29’s intraday low of $34.4.

MACD Showing Strengthening Bearish Momentum For Solana

Solana’s momentum oscillator MACD is showing signs of strengthening downside momentum.

Positive bars on the MACD histogram are contracting, indicating that the MACD line (difference between 12-day and 26-day EMA) is moving towards the MACD signal line (9-day EMA of MACD).

Once the MACD line crosses below its signal line, it will chart a technical pattern called the bearish crossover. Traders consider the pattern a sell signal.

A sell-off would see SOL prices testing immediate support near $34. Moreover, a breach below immediate support might push Solana prices near $30. Finally, a marketwide sell-off could see SOL fall nearly 26% from current prices to test support near $26.

SOL prices rebounded off of the $26 support level on Jun 14 to start its rally that led to Solana prices jumping 64%.

Conversely, if bulls establish a foothold, SOL prices might start an uptrend. The altcoin would have to move and consolidate above immediate support from its 20-day exponential moving average (20-day EMA, red wave) near $37.

Also Read: Potential SOL liquidation on Solend Protocol puts Solana at risk.

Moving above immediate resistance would provide Solana the impetus to target resistance near $42, which has resisted SOL’s price action since Jun 1.

Finally, a sustained uptrend would help SOL rise by nearly 35% to challenge resistance from its 50-day EMA (purple wave) near $47 before corrections pare gains.

At writing, SOL was trading at $34.8, down 1.4% on the day.