Recent geopolitical tensions, particularly the U.S. assault on Iranian nuclear facilities, have stirred panic in financial markets. Cryptocurrencies, especially altcoins, are feeling the heat, with Solana (SOL) leading the pack in losses. After a drop of 20% from its May apex of roughly $185, Solana is currently hovering around $148.
This downward shift echoes investors’ fears that SOL’s upward trajectory is faltering. Respected analyst Carl Runefelt highlighted that Solana has executed a Head and Shoulders pattern, a bearish technical formation that often portends additional downward movement. SOL’s price has slipped below this pattern’s neckline, suggesting the possibility of further short-term declines.
Solana’s failure to regain its previous support levels during minor rebounds adds to the bearish perspective. With negative momentum indicators and a shaken broader market sentiment, a rapid recovery seems unlikely unless the macroeconomic climate steadies.
Solana, once a stellar performer of the previous cycle, is now battling a bearish market. Amid global macroeconomic uncertainties and intensifying geopolitical conflicts, Solana is struggling, trading over 50% below its all-time high. According to Runefelt, Solana’s completed Head and Shoulders pattern and the breach of the pattern’s neckline indicate a potential fall to around $106.30, a level last seen in February.
Such a decline mirrors the broader weakness in the altcoin market. Despite initial optimism for an altseason, capital has been withdrawn from high-risk assets, favoring Bitcoin and stablecoins amid the uncertainty. Solana’s inability to reclaim previous highs or establish higher lows suggests a retreating market. If the bulls don’t act swiftly, SOL may face an extended phase of consolidation or further losses.
Solana is feeling the squeeze as it plunges below the critical 200-day simple moving average (SMA) of $149.54. This breakdown points to increasing bearish sentiments and a loss of momentum after weeks of stagnation below the $155-$160 resistance zone. Currently, SOL is trading at roughly $135.99, down nearly 3% on the day and over 20% from its May peak.
The chart shows a rejection near the 100-day SMA (green line), and the sustained move below both the 200-day and 50-day SMAs (blue line) suggests a structure leaning heavily towards the downside. If the current trend persists, Solana could revisit the $120-$125 range, a strong support level in early Q1 2025. A daily close back above $149 would be required to neutralize the bearish short-term structure and shift the sentiment. Until then, the downside risks prevail.
