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This Solana (SOL) Chart Pattern May Cause Some Serious Trouble

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Fri, 2/02/2024 - 14:29
This Solana (SOL) Chart Pattern May Cause Some Serious Trouble
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Solana is showing signs of a potential double top pattern on its price chart — a bearish formation that could spell trouble for the short-term price action on the SOL/USD chart. This pattern, characterized by two consecutive peaks at approximately the same level, can indicate that a reversal from the current uptrend may be imminent.

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The price of SOL recently faced resistance near the $100.60 mark, where the second peak of the potential double top is forming. A failure to break through this level could see SOL retreating to find support. 

SOLUSD Chart
SOL/USD Chart by TradingView

The first local target on the downside would be the $95.07 level, which previously acted as both support and resistance. A breach below this point may lead to a test of the more critical support at $77.08, a level that could be decisive for the medium-term market sentiment around SOL.

If SOL breaks below these support levels, it may confirm the double top reversal, potentially triggering further declines toward the $59.37 area. This level may serve as a crucial psychological and technical support, beyond which there is a substantial void until the next significant support zone.

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The ecosystem's growth, while robust, has recently been overshadowed by concerns over the failed Jupiter airdrop and the controversies surrounding token allocations. Such events can impact investor confidence and contribute to potential price declines, as market participants reassess the network's governance and the project's execution capabilities.

Despite these challenges, there is a bullish scenario to consider. If SOL can maintain its foothold above the $77.08 support and invalidate the double top pattern by breaking above $100.60, it could negate the bearish outlook and pivot toward growth. A successful retest of the $100.60 level as support instead of resistance would open the door for SOL to target higher levels, possibly reaching new highs if broader market sentiment turns favorable.

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