Solana (SOL) is showing bearish signals against Ethereum (ETH), with technical analyses suggesting a potential correction of over 40% in the SOL/ETH pair. This forecast urges investors to closely monitor Solana’s critical support levels. As competition between these two blockchain giants intensifies, the near-term outlook appears challenging for Solana.
Bearish Pattern Emerges in SOL/ETH Pair
The weekly chart for SOL/ETH reveals a rising wedge pattern, a classic bearish indicator. This formation signals weakening market momentum and a possible price decline. In a rising wedge, the convergence of upper and lower trendlines indicates fading upward strength.
Following a strong rally throughout 2023, the pair is now trading near the wedge’s apex. The weekly RSI indicator, having corrected from the overbought zone, reinforces this bearish outlook. A breakdown below the wedge’s lower trendline could result in a 40-45% drop, potentially driving the price down to 0.03779 ETH.
Currently, SOL/ETH is trading well above its 50-week EMA, located around 0.05057 ETH. A move below this EMA could amplify selling pressure. Additionally, declining trading volumes align with this bearish setup, indicating an acceleration of sell-offs.
Ethereum’s Positive Outlook vs. Solana’s Challenges
Ethereum’s weekly chart is painting a more optimistic picture, forming a rising triangle pattern. The horizontal resistance level of $4,000 is emerging as a critical target for December. The RSI remains neutral, suggesting room for further upside for Ethereum.
Conversely, Solana’s performance against the dollar is more cautious. The SOL/USD pair is trading near the upper boundary of an ascending channel that has persisted throughout 2024. This resistance zone, particularly between $210 and $268, could trigger significant selling pressure. If this scenario unfolds, Solana’s price may retreat to the middle or lower bounds of the channel, targeting the $145 level, which aligns with its 50-week EMA.
What This Means for Investors
As highlighted by Turkish NY Radio, these technical signals suggest a period of heightened volatility for Solana and Ethereum. While Ethereum shows signs of strength with key bullish indicators, Solana faces mounting risks from its technical setup.
Investors should carefully assess market trends, keep an eye on critical support and resistance levels, and adjust their strategies accordingly. Whether it’s Ethereum’s upward momentum or Solana’s potential correction, understanding these dynamics is crucial for navigating the current market conditions.
