Solana Risked 35% Price Drop With SOL Painting Megaphone Pattern

Solana risked 35% price drop with the SOL token painting a megaphone pattern and the market grapples with a few bearish setups if it manages to break below the 50-week moving average as we are reading more today in our latest altcoin.

Solana risked 35% price drop in the upcoming days and it came closer to painting a megaphone pattern. The megaphone setup consists of a minimum of lower lows and two highs and forms during a period of higher market volatility. Generally, the partners consist of five consecutive swings with the latest one acting as a breakout signal. SOL was painting a similar pattern since the start of 2022 with the coin undergoing a new pullback after testing the megaphone upper trendline close to $140 as resistance.

As a result of the pattern, the SOL token can extend the decline to test the megaphone lower trendline with the support nearing $65 and about 35% below the price today. If the scenario plays out, the SOL token could crash further after forming the fifth swing on the prevailing megaphone structure and while looking for a perfect downside target in the case of a breakout looks tricky, traders typically select it by measuring the distance between the two trendlines from the points of lower one breaks and the profits hen the price hits 50-60% of the distance.

The bearish breakout risks putting the SOL price en route to $40 in the upcomign weeks. On the other hand, SOL’s bearish megaphone setup can fall short of hitting this breakout target as the price holds above the flurry of support levels. These levels include SOl’s 50-week EMA and upward slowing trendline which served as accumulation zones for the traders. If the price falls below the 50-week EMA to seek a bounce from the rising trendline support and it can confirm the presence of the rising wedge for bear flag setup alogn with the megaphone pattern upper trendline and a bearish setup.

The rising wedge’s downside target seems to be near $60 after measuring a maximum distance between the upper and the lower trendline by subtracting it from the breakout point near $100. in the meantime, the flag’s downside target is close to $30 after calculating the height of the preivous uptrend and subtracting from the breakout point of $90.