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▲ Solana (SOL)/ChatGPT Generated Image
Although Solana's (SOL) ascending channel, maintained for over three months, appears to be a bullish structure on the surface, BeInCrypto warned that this pattern is a risk signal that could repeat January's 54% plunge.
According to the cryptocurrency specialized media BeInCrypto on May 27 (local time), Solana has been trading within a parallel ascending channel since February 6, but analysis suggests that this structure may be closer to a bearish continuation pattern than a true trend reversal. Solana is currently hovering about 3% above the channel's lower trendline, and on-chain indicators simultaneously showed weakening confidence among long-term holders and decreased defensive power among short-term holders.
BeInCrypto pointed out that while Solana has been setting higher highs within the ascending channel since early February, buying volume has continuously decreased. This means that despite the price creating new highs above $97, the amount of funds supporting each upward movement has declined. The outlet analyzed that a broader bearish trend remains a more probable outcome until Solana forms a closing price above the channel's upper boundary.
Glassnode's Solana HODLer Net Position Change metric was also presented as a warning sign. This metric tracks the daily change in the supply of SOL held by wallets for over 155 days. The indicator had continuously remained in positive territory since early March 2026, but it decreased by 13% in just one day, from approximately 3.2 million SOL on May 25 to approximately 2.78 million SOL on May 26. Long-term holders are still net buyers, but the accumulation rate significantly slowed down as the price fell towards the channel's lower boundary.
Short-term holder indicators also supported the bearish interpretation. Solana's Short-Term Holder Net Unrealized Profit/Loss (NUPL) is currently -0.157, which is much higher than the deep capitulation zone during the February plunge. It is also relatively close to the six-month high of -0.03 recorded on May 11. BeInCrypto believes that if short-term holders' losses are still small and their confidence is weakened, they are likely to sell first rather than endure deeper losses if the trendline is broken.
The price baseline is clear. Solana is trading at $83.78, approximately 3% above the channel's lower trendline of $81.24. The $81.24 level coincides with the Fibonacci 0.786 retracement level of the recent rally from April to May. If the daily closing price forms below $81.24, a channel breakdown will be confirmed, and the first downward target is set at $76.61. If the decline continues, $63.21 will be the next benchmark, and if the bearish continuation trend from late January is fully reflected, it could open up to $41.53, approximately 50% lower than the current price.
For a rebound, a gradual recovery is needed. Recovering $84.89 is the first condition to slow down the immediate bearish trend, and a daily close above $87.45 is presented as a more significant turning point. This price has been a resistance zone, preventing all upward attempts since May 20. If $87.45 is surpassed, the path to $93.17 opens, and a clear break above $98.29 weakens the bearish continuation pattern itself. Currently, a daily close below $81.24 is considered a key divergence point separating a mere correction from a re-enactment of January's 54% plunge.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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