After Solana (SOL) failed to claim the $155 mark in the last 24 hours, the token’s technical indicators suggest that the decentralized finance (DeFi) asset is preparing for further downside.
According to crypto trading expert Alan Santana, Solana is flashing bearish potential, indicating a possible drop below the crucial $100 support level.
In a TradingView post on July 3, Santana pointed out that Solana is undergoing a major ‘ABC’ correction pattern. Notably, the ‘ABC’ correction is a concept in technical analysis that posits market prices move in predictable patterns, often forming a zigzag lower.
‘Part A’ involves a chart moving higher and then dropping. ‘Part B’ sees a rebound that makes a lower high. Elsewhere, ‘Part C’ continues to make a lower low, though sometimes it might hold the first low.
In this case, Santana explained that the asset’s chart indicates the top of wave ‘B’ for the last sub-ABC wave is in, meaning Solana could be destined to drop below $100.
This prediction aligns with Solana’s trading price in January 2024, indicating a possible return to this base level of around $80. To account for potential variability, Santana suggested a price range between $80 and $100.
SOL price analysis chart. Source: TradingView
The expert identified this potential price movement as an SSD wave (Surprise-Super-Down-Wave) due to its significant magnitude, estimated to be between 40% and 50%.
“The top of wave B for the last sub-ABC wave is in… Solana is now headed toward $80. This is the same price at which Solana traded around January 2024. Let’s make it a range to be fair: Solana is moving toward the $80 – $100 price range next,” the expert said.
Further downside signals
The analysis also underscored the potential for further downside due to a notable decrease in trading volume. If Santana’s analysis holds, Solana could experience a significant drop, losing its $100 support and potentially reaching as low as $80, representing an over 45% decline from its current price.
Indeed, the sudden correction in Solana’s price over the last 24 hours aligns with the overall market sentiment. It’s worth noting, however, that in the past, Solana has defied market trends and rallied mainly due to meme coin activity on the platform.
Notably, SOL is trading in the red despite a new report indicating that Solana-based meme coins outperformed Ethereum (ETH)-based counterparts by 800% in the first half of 2024.
Looking ahead, if SOL plunges below $100, it could be an ideal moment for investors who missed the current rally to get involved. This comes at a time when Solana is receiving hype around a possible exchange-traded fund (ETF).
At press time, Solana was valued at $143 and was facing the $150 resistance zone, showing daily losses of over 3%. However, on the weekly chart, SOL has gained almost 4%.
SOL seven-day price chart. Source: Finbold
Overall, attention is on Solana’s short-term price movements, with the $140 support as the key zone to monitor. Losing this level could lead to further losses. On the other hand, reclaiming the $145 resistance zone could be in play if the general market records an upside.
