The price of Solana (SOL) may fall to $ 70 per token in the coming weeks as head and shoulder adjustments have emerged in the daily time frame and may indicate a 45% decline.
The chart below shows that the price of SOL rose to almost $ 217 in September 2021, fell to a support level close to $ 134, and then set a new record high of $ 260 in November 2021. Earlier this week, the price dropped back to try out the same $ 134. -level of support before moving to the lowest level in 2022 at $ 87.73.
This phase of pricing seems to have shaped the head-and-shoulder setting, a bearish-turning pattern containing three consecutive peaks, with the middle one being around $ 257 (called “head”) higher than the other two around $ 200 to $ 210 and right shoulder).
Meanwhile, the three SOL peaks placed at the top of the total support level at $ 134, called the “cutout”. A fall below it signals an extended downward trend to a level at a length equal to the maximum distance between the head and neckline.
In the case of SOL, the distance is around $ 137, making the target price for head and shoulders almost $ 170.
The trend so far
The bearish outlook came when the price of SOL fell by more than 22% this week, and currently altcoin is around 55% of its record high, well behind other high-capitalized digital assets, including Bitcoin (BTC) and Ether (ETH).
At the heart of the steady decline in the cryptocurrency market is the US Federal Reserve’s decision to unleash its $ 120 billion-a-month buyout program, followed by three or more interest rate hikes spanning 2022.
The central bank’s loose monetary policies have helped raise the cryptocurrency market’s valuation from $ 128 billion since March 2020 to as much as $ 3 trillion in November 2021. Therefore, there is evidence of declining investor influence to limit its exposure to overblown markets. , including Solana, which has gained almost 12,500% since March 2020.
Consequently, if the crypto market continues to decline in future sessions, SOL will also be in danger of confirming its head and shoulder setting.
Short-term SOL forecasts
While the SOL chart with a longer time frame tends toward a long-term bearish setup, its short-term outlook looks relatively bullish.
Related: Bitcoin fell to a six-month low of close to $ 38,000
This is mainly due to two factors. First, the price of SOL fell to a critical level of support of $ 116, which helped limit its attempts to fall in September 2021. And second, its daily relative strength index (RSI) fell below 30 – the classic buy signal.
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