Is Solana's Inverse Head and Shoulders Pattern Setting Up a $90+ Pump?

The recent price action of Solana (SOL) has sparked intense debate among traders and analysts, particularly regarding the validity of an inverse head and shoulders pattern that initially suggested a bullish reversal. However, a closer examination of technical indicators and on-chain data reveals a more nuanced-and arguably bearish-picture. This analysis explores whether the pattern's breakdown and subsequent price dynamics could lead to a $90+ rally or instead signal a deeper correction.

The Inverse Head and Shoulders Pattern: A Broken Bullish Play

An inverse head and shoulders (IHS) pattern typically signals a potential reversal from a downtrend to an uptrend. For Solana, the pattern formed at the bottom of a descending channel, with a neckline between $120 and $125 acting as a critical threshold for confirmation according to analysis. Traders initially anticipated a breakout above this level, which would have projected a price target of $200+ based on the pattern's measured move.

However, the setup was invalidated when Solana failed to sustain momentum above $200 and instead broke below the neckline at $182.89. This breakdown not only erased the bullish case but also exposed the asset to further downward pressure. The failure to hold key support levels-such as $157.40 and $131.55-suggests that the bearish bias remains intact, with the next potential target potentially falling below $131.55 according to market analysis.

Technical Indicators Confirm Momentum Shift

The Awesome Oscillator (AO), a momentum indicator, has flipped from positive (green histogram) to negative (red histogram), signaling that buying pressure has dissipated according to technical analysis. This divergence between price and momentum is a classic warning sign of a potential breakdown. Additionally, the Relative Strength Index (RSI) has shown bearish divergence, with lower highs in momentum despite modest price rebounds-a further indication that sellers are in control.

Volume analysis also paints a grim picture. The right shoulder of the IHS pattern exhibited weaker volume compared to the left shoulder, a sign of buyer fatigue according to market data. This lack of participation during price rallies underscores the market's reluctance to commit to a bullish narrative.