A chart pattern suggests the smart contract platform Solana (SOL) could plunge by more than 50% if it loses a critical support level, according to a popular crypto trader.
Ali Martinez tells his 128,800 followers on the social media platform X that the Ethereum (ETH) rival appears to be forming a right-angled ascending broadening pattern.
[adinserter block="1"]Right-angled ascending broadening wedges consist of a lower trendline indicating higher lows and a steeper upper trendline that is almost parallel, according to the stockbroking firm Enrich Money. Traders tend to interpret them as bearish reversal signals that suggest an asset’s bullishness is losing momentum.
Martinez says if SOL breaks below $130 it “could open the door for a drop to $65.”
With Solana trading at $135.10 at time of writing, a drop to $65 would represent a nearly 52% plunge. SOL is already down more than 9% in the past 24 hours.
Martinez notes that Solana investors “appear to be in a state of ‘fear’.”
The trader says chart patterns suggest SOL could also lose value against Bitcoin (BTC).
“Solana against Bitcoin is starting to resemble Ethereum past price action against BTC. If this pattern holds, SOL could drop to 0.0008 satoshis!”
Martinez notes that Solana’s network activity and transfer volume have both plummeted.
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