solana

Solana’s weekend bounce risks turning into a bull trap — Can SOL price fall to $60 next?

More bearish cues for SOL comes from a bull flag setup that’s now breaking to the downside.

A rebound move witnessed in the Solana (SOL) market this weekend exhausted midway as its price dropped below the $90 level from a high of $96 on Feb. 21. In doing so, SOL price technicals are now risking a classic bearish reversal setup.

Solana price risks dropping to $60

Dubbed head-and-shoulders (H&S), the technical pattern emerges when the price forms three peaks in a row atop a common support level (called a neckline). As it typically turns out, the pattern’s middle peak, called a “head,” comes longer than the other two peaks, called the left and right shoulders, which come to be of similar heights. 

The H&S pattern tends to send the prices lower—at length equal to the maximum distance between the head and the neckline—once they decisively break below its neckline. As a result, Solana, which has been forming a similar technical structure lately, risks sliding toward $60, or almost 30%.

SOL/USD daily price chart featuring head-and-shoulders setup. Source: TradingView 

 

Interestingly, the H&S downside target, near $60, was also instrumental as support in August 2021, right before Solana’s price rally to its record high above $250.

Bear flag increases downside risks

The risks of Solana undergoing a period of another major selloff have been also increasing due to a technical pattern called a “bear flag.”

Related:  Bitcoin inactive supply nears record as over 60% of BTC stays unspent for at least 1 year

Notably, SOL’s price has been breaking out of the bearish continuation setup. In doing so, it now risks falling by as much as the length of its previous downtrend, called “flagpole,” when measured from the point of breakout, as shown in the chart below.

SOL/USD daily price chart featuring bear flag setup. Source: TradingView

 

As a result, SOL’s bear flag breakout risks sending its price to $60 or lower, like the H&S pattern.