Solana Price Shows Bearish Signals: Are We Heading for a Bigger Drop?

In recent trading sessions, Solana's price has come under pressure due to a bearish engulfing candle forming at the $167 resistance level, indicating weakening momentum and increasing risks of a drop to lower support levels.

Key Takeaways

Solana's price is facing downward pressure following a bearish engulfing candle at the $167 resistance.
The $146 support level is critical; failure to hold it could lead to a swift decline towards $112.
For a bullish reversal, Solana needs to reclaim and close above the $167 resistance with significant volume.

Solana bearish engulfing suggests further downside as weakness remains

Current Situation of Solana's Price

Solana's price action has recently become more precarious after a bearish engulfing candle emerged at the key $167 resistance zone. This level has historically posed challenges for bulls, and the rejection here has sent SOL prices back towards a high-time-frame support area. This raises concerns that the market may be gearing up for a deeper decline.

SOLUSDT (1D) Chart, Source: TradingView

The attempt to recover the $167 zone has proven unsuccessful, as the formation of the bearish engulfing candle has tilted short-term momentum back toward the downside. Such technical patterns often indicate buyer exhaustion and suggest a potential reversal, particularly when they appear at key resistance levels.

After the recent rejection at the $167 mark, the price has retreated to the high-time-frame support level at $146. While this support has been respected multiple times in the past, the recent responses indicate a lack of strong bullish follow-through. Prolonged testing of this support level without a significant bounce increases the chances of a breakdown. In technical analysis, the more a support level is tested, the weaker it typically becomes.

A downturn below the $146 level would be alarming, as the chart reveals limited structural support between this point and the next significant support zone at $112. If Solana's price falls below $146, the decline could be rapid due to thin liquidity and weak price acceptance in this area. Additionally, a drop to $112 aligns with previous market structures, making it a plausible target for further downside.

Future Expectations for Solana's Price

To avoid an accelerated drop towards $112, Solana must maintain support at $146. A decisive break below this level would confirm a continuation of bearish trends, while a robust rebound could present another opportunity to test the $167 resistance. Until Solana manages to reclaim and maintain the $167 mark with strong trading volume, the bearish engulfing candle at resistance serves as a strong warning that downward momentum may still be in play.