A rebound move seen in the Solana (SOL) market this weekend petered out midway as its price dipped below the $90 level from a high of $96 on Feb 21. By doing so, SOL price technicians are now risking a classic bearish reversal setup.
Solana price at risk of falling to $60
Called head and shoulders (H&S), the technical pattern occurs when price forms three spikes in a row above a common support level (called the neckline). As is often the case, the pattern’s middle peak, called the “head,” is longer than the other two peaks, called the left and right shoulders, which can be of similar height.
The H&S pattern tends to send prices lower, with a length equal to the maximum distance between the head and the neckline, once they decisively break below its neckline. As a result, Solana, who has been building a similar technical structure lately, is at risk of sliding towards $60, or nearly 30%.
SOL/USD daily price chart with head and shoulders setup. Source: TradingView
Interestingly, the H&S downside target near $60 was also pivotal as support in August 2021, just before Solana price surged to its all-time high above $250.
Bearish flag increases downside risks
The risks of Solana going through a period of another major sell-off have also increased due to a technical pattern called a “bear flag.”
Related: Fund Ahead? Solana paints her first ‘death cross’ while SOL loses 50% in January
In particular, SOL price has broken out of the bearish continuation setup. By doing so, you now risk falling as long as the length of your previous downtrend, called the “flag pole”, when measured from the breakout point, as shown on the chart below.
SOL/USD daily price chart with bearish flag setup. Source: TradingView
As a result, the SOL bearish flag breakout risks sending its price to $60 or lower, like the H&S pattern.
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This post Solana’s weekend bounce risks turning into a bull trap. Can SOL price drop to $60 next?
was published first on https://cointelegraph.com/news/solana-s-weekend-bounce-risks-turning-into-a-bull-trap-can-sol-price-fall-to-60-next
