Solana's weekend bounce risks turning into a bull trap — Can SOL price fall to $60 next?
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.
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 neckline). As it typically turns out, the pattern's middle peak, called "head," comes longer than the other two peaks, called 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%.
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.
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: Bottom ahead? Solana paints its first 'death cross' as SOL losses 50% in January
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.
As a result, SOL's bear flag breakout risks sending its price to $60 or lower, like the H&S pattern.
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