Solana Faces 40% Drop Risk as $178 Resistance Holds

Solana's price has faced significant resistance at the $178 level, resulting in multiple rejections. This resistance is critical as it aligns with both the value area high and a key high time frame supply zone. Since reaching the local swing high, the price action has formed a bearish pattern, marked by lower highs and lower lows, suggesting potential weakness. If the price fails to surpass the $178 resistance, the next crucial support level to monitor is around $105.89. This level is important because it could form a bullish double bottom if defended, potentially signaling a trend reversal.

The current market structure and volume behavior indicate that further downside movement is likely unless bulls can quickly regain control. The rejection from the $178 resistance continues to impact Solana’s price structure, despite several attempts to push higher. The confluence of the value area high and high time frame resistance makes this region particularly significant, and the failure to break above it has confirmed a short-term bearish structure.

From an auction theory perspective, the loss and backtest of the value area high suggest that the market may seek balance by moving toward the value area low. This would bring the price into the $105.89 zone, a high time frame support level that also represents a key structural low. A sweep of this area, followed by a strong buyer response, could establish a double bottom pattern, which is often a reliable reversal signal.

Another concern for bulls is the local trend, which continues to form lower highs and lower lows beneath resistance. If the price fails to reclaim lost levels soon, it increases the probability of continuation to the downside. However, a test of $105.89 isn’t inherently bearish; it may instead offer a key pivot point for Solana to reset and build strength for another move higher.

In the coming price action, as long as Solana trades below $178, the probability of further downside remains elevated. A move toward $105.89 is likely, and if this level holds, it could form a double bottom and launch a rotation back toward resistance. Failure to defend this support, however, would confirm a breakdown and risk shifting the larger trend bearish. Watch for volume signals near the lows to confirm buyer interest.