Solana (SOL): A Potential 50% Plunge if Critical Support Level is Breached
In the ever-volatile world of cryptocurrencies, chart patterns can provide valuable insights into potential price movements. One such pattern, which has recently caught the attention of crypto traders, is the right-angled ascending broadening pattern. This pattern is currently forming on the chart of Solana (SOL), the Ethereum (ETH) rival that has been making waves in the crypto space.
What is a Right-Angled Ascending Broadening Pattern?
A right-angled ascending broadening pattern is a bearish chart formation that appears as a series of higher highs and higher lows, forming a right angle. This pattern is typically followed by a significant price drop, often exceeding 50% of the previous price range.
Solana’s Formation of the Right-Angled Ascending Broadening Pattern
Popular crypto trader, Ali Martinez, recently pointed out this potential bearish signal to his 128,800 followers on Twitter. According to him, Solana’s price action over the past few months resembles a right-angled ascending broadening pattern. This pattern is formed by the alternating higher highs and higher lows.
- Higher Highs: Solana’s price reached a high of $214.96 on May 12, 2021, and then touched a new high of $253.96 on June 1, 2021.
- Higher Lows: Solana’s price saw a low of $154.23 on May 19, 2021, and then a lower low of $136.45 on June 13, 2021.
If this pattern continues, Solana could be in for a significant price drop.
Effects on Individual Investors
For individual investors holding Solana, a potential 50% plunge could mean significant losses. It is essential to keep an eye on the price action and consider diversifying your portfolio to minimize risk. Additionally, setting stop-loss orders at strategic levels can help mitigate potential losses.
Effects on the Crypto Market and the World
A significant price drop in Solana could have ripple effects on the crypto market. Solana is a popular smart contract platform, and its success has been attributed to its fast transaction speeds and low fees. A drop in its price could lead to a loss of confidence among investors, potentially leading to a broader market sell-off.
Furthermore, the crypto market is closely interconnected with the traditional financial markets. A significant drop in Solana’s price could lead to increased volatility in the broader financial markets, particularly the technology sector.
Conclusion
The right-angled ascending broadening pattern is a bearish chart formation that could signal significant price drops for Solana. If this pattern continues, Solana could be in for a potential 50% plunge. Individual investors holding Solana should consider diversifying their portfolio and setting stop-loss orders to minimize potential losses. Additionally, a significant price drop in Solana could have ripple effects on the crypto market and the broader financial markets.
It is essential to keep a close eye on price action and stay informed about market developments. By doing so, investors can make informed decisions and minimize risk in their portfolios.
