Solana Faces Potential Breakdown After Key Rejection – Is $100 on the Horizon?

Summary: Solana (SOL) is struggling to maintain its price above crucial support levels after experiencing a significant pullback. Analysts warn that a continued decline could see the cryptocurrency fall to around $100. Market observers note a potential bearish pattern forming that could impact future price movements, while others remain hopeful for a rebound.

Key Takeaways

Solana’s price is currently 54.3% below its all-time high of $293.
The cryptocurrency recently dropped to a two-week low of $130 following an 8% decline.
Analysts suggest the potential for a major drop to the $100 level if Solana fails to recover.
A bearish Head and Shoulders pattern is forming, indicating possible further declines.
Some analysts see potential for a bullish reversal similar to past market behaviors if Solana can hold its current support.

Solana, MATIC, Worldcoin, SUI, Ethereum

Solana Breaks Below Important Support Levels

Recently, Solana saw a significant drop of 8%, reaching a two-week low of $130. This decline comes after the cryptocurrency lost its crucial psychological barrier of $200 at the end of October. For the last three months, SOL has struggled to maintain bullish momentum, fluctuating between the $115 and $145 range.

Earlier this year, Solana began to recover from a lengthy downtrend, even surging past the $145 resistance just last week. However, the recent market pullback has pushed Solana back beneath these key support levels.

Market analyst BitGuru noted that Solana's price momentarily touched a strong demand zone after a clean breakdown. They indicated that if the price can stabilize at current levels, it might lead to a "sharp relief move toward previous highs."

Similarly, analyst Man of Bitcoin pointed out that Solana had broken below its two-week ascending trendline, which had been pivotal in supporting a recent 17% surge. The price also fell below the $136 mark—a level where Solana had previously found support.

Solana

The analyst warned that if Solana continues to decline and falls beneath the $129-$136 range, it may face serious issues. Should selling pressure persist, the cryptocurrency might retrace further, potentially falling by 25% and testing the $100 level.

Analysts Raise Alarm Over Head and Shoulders Pattern

Other market analysts have pointed to a concerning pattern on Solana's chart that could indicate a breakdown to new lows. Specifically, Solana appears to be forming a bearish Head and Shoulders pattern over the past two years.

According to this pattern, the left shoulder formed during a rally in early 2024, with the neckline situated around the $120 mark. The head was established during a bullish upswing towards the end of 2024, leading to Solana's ATH of $293 last year. Most recently, the right shoulder began forming after a Q3 rally and subsequent correction in Q4.

Trader Slashology expressed concern, observing that the current market conditions are "looking bad," and advised investors to "prepare for the worst" as Solana nears its neckline. They forecast potentially severe declines of 35%-40%, pushing the price down to the $75-$80 range.

Conversely, market observer Crypto Curb proposed a different scenario. They compared SOL’s recent activity to that of the S&P 500 (SPX) between 2009 and 2011, noting a similar bearish formation that was invalidated when SPX rebounded above its neckline. If Solana can show resilience and rise from current levels, it could experience a similar positive turnaround.

As of now, Solana is trading at $134, experiencing a 5.6% drop within the daily timeframe.

Solana, sol, solusdt

SOL’s Weekly Chart Performance. Source: SOLUSDT on TradingView