Solana Faces 12% Drop Risk as Bearish Patterns Emerge

Solana, a prominent cryptocurrency, has recently exhibited mixed signals that have caught the attention of traders and analysts alike. The cryptocurrency has shown signs of recovery after enduring several days of selling pressure. Notably, Solana has formed a bearish falling wedge pattern on the four-hour timeframe, similar to Bitcoin. This pattern suggests a potential target of $120 if SOL closes a four-hour candle below $136, indicating a 12% drop.

At the time of reporting, SOL was trading near $137.5, reflecting a 4.76% price drop in the past 24 hours. The price drop has brought SOL to the neckline of a bearish head and shoulders pattern on the four-hour timeframe, located within a rising wedge, with $136 as the neckline. This bearish outlook is further strengthened by the formation of a bearish engulfing candlestick pattern and rejection from a descending trendline that has acted as a resistance level since January 2025.

However, the bearish sentiment could change if Solana breaks the descending trendline and closes a daily candle above $147.50. If this occurs, SOL could potentially rise by 22% to reach $180 in the future. This highlights that bulls are currently dominating despite the bearish outlook, which is preventing SOL from falling further.

A notable crypto expert has reinforced the bearish outlook for Solana, highlighting that the TD Sequential indicator, which previously signaled a buy ahead of SOL’s 22% rally, now shows a sell signal. This raises questions about whether the price will continue to decline, or if the indicator is merely a signal.

Despite the bearish indicators, intraday traders appear to be acting contrary to the overall market sentiment, as they are strongly betting on the long side. This highlights that bulls are currently dominating despite the bearish outlook, which is preventing SOL from falling further.