Solana price is close to confirming a bearish breakout of the double top pattern, signaling that the downtrend may extend for the next few weeks.
summation
- Solana prices have fallen more than 12% this month.
- Reduced network activity and ETF inflows have reduced investor attractiveness for the token.
- A multi-year double top pattern has formed on the weekly chart.
According to data from crypto.news, Solana (SOL) traded at $127.7, down 12.3% from its monthly high and down more than 48% from its September high.
The seventh-largest cryptocurrency asset could be at risk of further downside as it has formed a huge bearish pattern on its charts as some of the network’s key on-chain indicators have fallen over the past few months.
Total value locked across DeFi protocols built on blockchains fell to $23.8 billion from a year-to-date high of $35.1 billion in September, according to data from CoinGlass. Fees generated by protocols running on Solana also decreased from $31 million to $8 million over the same period.
These metrics suggest that user activity on the network has weakened, leading to decreased investor demand for the token.
Demand for Solana has also been hit by a slowdown in physical Solana ETF inflows. According to data compiled by SoSoValue, the eight SOL ETFs recorded $199.2 million in their first trading week after launch, but then declined to just $13.1 million last week. These declines in inflows mean weaker demand from institutional investors, which could subsequently impact retail interest.
On the weekly chart, Solana has been forming a massive double top pattern since mid-2024. These patterns are characterized by two round tops and a low in between them, and when a break below the neckline is identified, it is often considered a bearish reversal signal.
At the time of this writing, the Solana price seemed poised to break below the pattern’s neckline at $120. In technical analysis, this pattern is identified when the price of an asset falls below the neckline and usually leads to further downside, especially when momentum indicators are bearish.
Momentum indicators such as MACD and RSI are trending downward at press time, showing that bears are dominating the market.
Therefore, if Solana price fails to maintain $120 as support, there is a risk of falling to $95, the lowest reached on April 7. This level has served as an important floor for most of this year.
Conversely, a sharp bounce above $155 that coincides with the 50% Fibonacci retracement level could invalidate the bearish setup and trigger a potential recovery.