Solana price has come under pressure this week as the crypto market crash accelerated. After peaking at $187 last week, the coin has pulled back to $159, and there are signs that the sell-off will gain steam. SOL was trading at $164.2 on Friday, down by 45% from the highest point this month.
Solana price technical analysis
The daily chart shows that the SOL price is at risk of further downwside in the coming days. That’s because the coin has formed a double-top pattern at $184.5 on the twelve-hour chart. This pattern is made up of two peaks and a neckline, which, in this case, is at $159.45.
A double-top pattern is one of the most accurate chart patterns in technical analysis as it sends a signal that investors are afraid to buy an asset above a certain price. In Solana’s case, investors are afraid of placing bids above the double-top point at $184.5 and the 50% Fibonacci Retracement level at $195.
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It has moved below the 50-period moving average, a sign that bears are in control for now. Also, the Relative Strength Index (RSI) and other oscillators have all pointed downwards, signaling that the downtrend is continuing.
The distance between the upper side of the double-top and the neckline is about 14%. Measuring the same distance from the neckline brings the target price to $136, which is a few points below the 23.6% retracement point.
The bearish Solana price forecast will be invalidated if it moves above the resistance point at $184.5.
Why SOL is plunging
There are a few reasons why the Solana price is in a downward trend. First, the decline is because of the ongoing crypto market crash, with Bitcoin falling from $111,900 last week to $106,000 today. A Bitcoin retreat often leads to more downside among most altcoins, including Solana.
Second, investors are dumping Solana meme coins. CoinGecko data shows that the market cap of all Solana meme coins has dropped from over $15 billion last week to over $11.4 billion today. Most of them, have tumbled in the last few days, with Fartcoin falling by 28% in the last seven days and Dogwifhat dropping by 18%.
Other top Solana meme coins like Bonk, Pudgy Penguins, Popcat, and Cat in a dogs world have all plunged by over 20%.
This plunge has had an impact on Solana’s ecosystem, with the 24-hour volume in its DEX protocols falling from to $2.23 billion. Those in the BSC Chain and Ethereum handled $12.3 billion and $3.4 billion.
The total supply of stablecoins in Solana’s network continues falling. It moved from a high of $13 billion earlier this month to $11.5 billion, and the trend is continuing.
Additionally, Solana’s funding rate has turned negative, a sign that investors expect the future price to be lower than the current one.
Therefore, a combination of tough macroeconomic news on trade, coupled with weak internal numbers mean that the Solana price will continue falling in the near term. Besides, June is usually the worst month for cryptocurrencies.
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