Solana risks 35% price crash with SOL price chart ‘megaphone’ pattern

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Solana (SOL) dangers crashing 35% within the coming days because it comes nearer to portray a so-called “megaphone” sample.

SOL value “megaphone” sample

Intimately, megaphone setups include a minimal of decrease lows and two greater highs and kind throughout a interval of excessive market volatility. However usually, these patterns consist of 5 consecutive swings, with the ultimate one sometimes appearing as a breakout sign.

SOL has been sketching the same sample for the reason that starting of 2022, with the coin undergoing a pullback after testing the megaphone’s higher trendline close to $140 as resistance — the fourth wing.

Because of the sample, the Solana token might prolong its decline to check the megaphone’s decrease trendline as help close to $65, about 35% under at the moment’s value. 

Might SOL crash additional?

If this state of affairs performs out, SOL might crash additional after forming the fifth swing on its prevailing megaphone construction. Whereas discovering an ideal draw back goal in case of a breakout is difficult, merchants sometimes choose it by measuring the gap between the 2 trendlines from the purpose the decrease one breaks and ebook earnings when the value reaches 50-60% of that distance.

SOL/USD weekly value chart that includes ‘megaphone’ breakout state of affairs. Supply: TradingView

A bearish breakout dangers placing SOL’s value en route to almost $40 within the coming weeks.

A pullback state of affairs

Alternatively, SOL’s bearish megaphone setup might fall in need of reaching its breakout goal as its value holds above a flurry of concrete help ranges.

These ranges embrace SOL’s 50-week exponential transferring common (50-week EMA; the purple wave) and an upward sloping trendline (the black line) which have served as accumulation zones for merchants, as proven within the chart under.

Because of this, an early pullback from 50-week EMA might invalidate the megaphone state of affairs.

SOL/USD weekly value chart that includes 50-week EMA and rising trendline help. Supply: TradingView

Suppose the value falls under the 50-week EMA, solely to hunt a bounce from rising trendline help. In that case, it might verify the presence of a “rising wedge” or “bear flag” setup in conjugation with the megaphone sample’s higher trendline — once more a bearish setup.

SOL/USD weekly value chart that includes bear flag/rising wedge state of affairs. Supply: TradingView

The rising wedge’s downside target seems to be close to $60 after measuring the utmost distance between its higher and decrease trendline (about $40) and subtracting it from the potential breakout level close to $100.

Associated: Profit taking and Bitcoin consolidation give bears an opportunity to take control

In the meantime, the bear flag’s downside target is close to $30 after calculating the peak of its earlier uptrend (about $60) and subtracting it from the potential breakout level close to $90.

The views and opinions expressed listed here are solely these of the writer and don’t essentially replicate the views of Cointelegraph.com. Each funding and buying and selling transfer includes danger, it’s best to conduct your personal analysis when making a call.