In a significant turn of events, Solana failed to conclude the weekly trading period on a positive note, witnessing a considerable downturn in its value. The current descending wedge pattern in which the SOL price is operating has been persisting without significant deviation, indicating a lack of strong bullish or bearish momentum in recent times. This trend is anticipated to lead to further downward movement as evident from the evident weakness among buyers, potentially resulting in an 8% to 10% drop in the coming days.
As the financial markets approach the midway point of the year, an increase in market volatility was predictable. However, the balance shifted in favor of bears as the on-balance volume has been steadily decreasing for over 40 consecutive days. Moreover, the trading volume during weekends notably dropped by more than 60% from its usual levels, indicating a prolonged bearish phase primarily due to reduced bullish participation.
The reluctance of bullish investors to accumulate Solana despite its discounted price raises questions. The recent bearish movement is nearing the liquidity zone, coinciding with the neckline of a double-top pattern. Rejections have been observed as the price ventured into these areas, prompting rebounds multiple times and establishing it as a critical juncture. Simultaneously, aligning with the M-shaped pattern's neckline, a substantial retracement is likely in the offing. With the impending monthly closure, it is anticipated that the price will maintain its bearish trajectory, potentially breaching the crucial support level at $100.
Furthermore, a further decline in the SOL price is predicted to test the subsequent significant support beneath $100 at $94.19. Historically, these levels have served as a foundation for initiating recovery, suggesting a similar price action might unfold in the initial days of the third quarter. A change in market dynamics, reflected by a recovery above $133 to $135, could prevent an extended bearish phase. Until such a reversal occurs, the outlook for Solana remains bearish, with price targets hovering around $95 by month-end.
