Solana Plunges 41% as Bulls Lose Control

Solana (SOL) buyers have retreated as the coin's price dips below a major support level, signaling a significant shift in market trends. Since reaching an all-time high of $295.83 on January 18, SOL's price has plummeted by 41% to its current level of $171.81.

The altcoin had been trading within an ascending parallel channel since June 2023, but has now dipped below the lower line of the channel. This development suggests a decisive shift in market trends and hints at a further price decline. Bears have taken control of the market as Solana breaks its multi-year-long channel, indicating a potential reversal in the coin's bullish trend.

The ascending parallel channel is formed when an asset's price moves between two upward-sloping parallel trendlines, indicating a sustained bullish trend with higher highs and higher lows. The upper line acts as resistance, while the lower line serves as support. When the price falls below the lower line, it signals a break in the uptrend and suggests that selling pressure has overwhelmed the buyers' strength, indicating bearish dominance in the market.

In addition to the channel breakdown, the coin has recorded negative Elder-Ray Indexes since January 27, confirming the strengthening bearish bias against SOL. At press time, this index is at -30.4, indicating strong selling pressure and potential further price decline.

According to its Fibonacci Retracement tool, SOL's price risks falling to $136.62 if buying pressure wanes further. If the bulls fail to defend this support level, the coin's price could dip to $120.72, a low it last reached in September. However, a resurgence in the demand for SOL will invalidate this bearish outlook. In that scenario, its price could attempt a retest of its breakout line, potentially propelling its price above the lower line of the ascending parallel channel and toward $220.58.