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.
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.
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