Solana (SOL) is at risk of a significant drop, potentially falling below $100, as market dynamics shift sharply due to a bearish pattern on the charts. Presently trading around $134, SOL's recent activity saw fluctuations between $126 and $135, with a chilling undercurrent influenced by broader market sentiment, particularly the Israel-Iran conflict.
The emergence of a rounding top pattern on SOL's daily chart indicates that previous bullish momentum has waned, leading to a potential bearish reversal. SOL peaked at $187 in late May but has since been under pressure as sellers have dominated the market amid low buying interest. The critical support level currently stands at $126; falling below this threshold would confirm the bearish trend and could lead to a dramatic price drop, with estimates suggesting lows of around $85.
Technical indicators support the bearish outlook. A rising Average Directional Index (ADX) reflects a strengthening downtrend, while the MACD has dropped into negative territory, illustrating a shift in momentum. If SOL can reclaim the neckline of the rounding top at $187, the bearish stance could shift, allowing for a potential recovery and paving the way toward $200.
On-chain indicators further reinforce these concerns, as network activity declines have tarnished SOL's utility. Data shows that the stablecoin market cap on the Solana blockchain has dropped from $13.137 billion to $10.638 billion within a two-month timeframe. The DeFi user count also dwindled from 6 million to roughly 2.95 million recently. This reduced activity suggests waning demand for SOL tokens, making it difficult for the price to recover significantly.
In summary, SOL's current price trajectory is precarious, with critical observations needed around the $126 support. A breach here could set the stage for a steep decline below $100. Investors should remain vigilant, monitoring both technical and on-chain signals that could influence Solana's future positioning in the market.
The emergence of a rounding top pattern on SOL's daily chart indicates that previous bullish momentum has waned, leading to a potential bearish reversal. SOL peaked at $187 in late May but has since been under pressure as sellers have dominated the market amid low buying interest. The critical support level currently stands at $126; falling below this threshold would confirm the bearish trend and could lead to a dramatic price drop, with estimates suggesting lows of around $85.
Technical indicators support the bearish outlook. A rising Average Directional Index (ADX) reflects a strengthening downtrend, while the MACD has dropped into negative territory, illustrating a shift in momentum. If SOL can reclaim the neckline of the rounding top at $187, the bearish stance could shift, allowing for a potential recovery and paving the way toward $200.
On-chain indicators further reinforce these concerns, as network activity declines have tarnished SOL's utility. Data shows that the stablecoin market cap on the Solana blockchain has dropped from $13.137 billion to $10.638 billion within a two-month timeframe. The DeFi user count also dwindled from 6 million to roughly 2.95 million recently. This reduced activity suggests waning demand for SOL tokens, making it difficult for the price to recover significantly.
In summary, SOL's current price trajectory is precarious, with critical observations needed around the $126 support. A breach here could set the stage for a steep decline below $100. Investors should remain vigilant, monitoring both technical and on-chain signals that could influence Solana's future positioning in the market.
