- Solana price bows to overhead pressure, closing in on the primary support at $20.
- A double-top pattern on the 12-hour chart could see SOL begin the recovery journey to $60.
Solana price continues to wriggle in the snares of the bears amid an elusive upside and weak support areas. Declines groped the entire crypto market on Tuesday despite signs of recovery toward the end of the previous week.
SOL is trading at $23 in the wake of a 10% loss in the last 24 hours. Its trading volume surged to $447 million from roughly $230 million (recorded on July 19), amplifying the extent of the breakdown.
Solana Price Downtrend Nears The Elastic Limit
An uptrend that started toward the end of June emanated from support at $20. This anchor zone has been crucial in stopping the initial losses in May (during the first selloff after the bull cycle). Solana spiked to above $30 and closed the gap toward $40 in the first week of July. However, an immense seller congestion zone at $38 curtailed the uptrend.
The above seller congestion zone marked the beginning of the ongoing downtrend, accentuated by the intense bearish wave sweeping across the cryptocurrency space.
It is essential to realize that support at $20 has stopped Solana’s losses twice, in May and June. Therefore, a recovery seems to be hovering at the horizon.
SOL/USD 12-hour chart
As Solana closes in on the tentative support at $20, a double-bottom pattern is likely to form. This is a highly bullish technical reversal pattern that comes into the picture after an asset hits a low price point a couple of times. Note that there is usually a moderate price peak between the two troughs.
The double-bottom pattern is confirmed in technical analysis when the asset bounces off the robust anchor zone. In other words, Solana could recoil at $20 amid an increase in trading volume. The pattern may blast SOL significantly upward if a break is confirmed above the seller congestion at $58.
Looking At The Other Side Of The Picture
The uptrend will fail to materialize if the prevailing technical outlook remains unchanged. For instance, a recently formed death cross pattern may validate the downtrend, propping bears for another leg down below $20.
A death cross pattern appears when a short-term moving average crosses below a long-term moving average. The 12-hour chart shows the 50 SMA crossing under the 200 SMA, a formation that may have triggered the ongoing breakdown.