As Solana (SOL) struggles to maintain its momentum amidst a broader market recovery, a bearish technical pattern has emerged, putting traders on edge. Solana’s price action over the past few days suggests that the cryptocurrency could face a significant decline, potentially as much as 12%, unless it can hold a crucial support level.

Solana’s Bearish Trend: A Falling Wedge Forms on the 4-Hour Chart

Solana has found itself in a precarious situation, as the cryptocurrency has recently formed a bearish falling wedge pattern on the four-hour timeframe. This pattern mirrors a similar price structure seen in Bitcoin (BTC), signaling that SOL might be on the verge of a price decline. Although the broader market has been seeing some recovery, Solana’s chart has turned more pessimistic, indicating potential risks for traders holding long positions.

At press time, Solana’s price stood at approximately $137.50, reflecting a significant 4.76% drop in the last 24 hours. In addition to the price drop, the trading volume has also decreased by 10%, suggesting lower participation from both traders and investors compared to previous sessions.

Key Levels to Watch: Will Support Hold at $136?

The most critical level to watch for Solana is the $136 support zone. This level represents the neckline of a bearish head and shoulders pattern, which has been forming on the four-hour chart. A breakdown below this level could signal further downside potential. According to technical analysis from AMBCrypto, if Solana closes a four-hour candle beneath the $136 mark, the cryptocurrency could face a 12% decline, possibly reaching the $120 range in the near future.

Traders are closely monitoring this level as it may serve as the deciding factor for Solana’s short-term price action. If the support fails to hold, further losses could trigger panic selling among traders.

Rejection from the Resistance Trendline: What’s Next for Solana?

Adding to the bearish sentiment, Solana has also faced rejection from a descending trendline that has acted as resistance since January 2025. This rejection, along with the formation of a bearish engulfing candlestick pattern, further strengthens the negative outlook for SOL. A bearish engulfing pattern typically signals that selling pressure is outweighing buying interest, a development that could fuel further declines.

However, not all hope is lost for Solana. While the current market conditions appear unfavorable, there remains a possibility for a bullish reversal. If Solana can break above the descending trendline and close a daily candle above $147.50, it could trigger a substantial rally, with some analysts predicting a rise of up to 22%, potentially bringing SOL’s price to $180.

The TD Sequential Indicator Flashes a Sell Signal

One of the most significant indicators fueling the bearish outlook for Solana is the TD Sequential indicator. A well-known tool among crypto traders, the TD Sequential indicator tracks price movements and attempts to identify buying or selling opportunities based on market momentum.

Previously, the TD Sequential indicator had signaled a buy opportunity ahead of a 22% rally in SOL’s price, but now, it is flashing a sell signal. This shift suggests that the momentum has turned against Solana, raising concerns that the cryptocurrency could be poised for further losses.

While some traders may be cautious about the implications of the sell signal, it is crucial to note that the TD Sequential indicator is not always a definitive predictor of future price movements. Still, its signal is a cause for concern and warrants attention from traders considering their positions.

Intraday Traders Remain Bullish: Long Positions Outweigh Shorts

Despite the bearish technical signals, intraday traders seem to be taking a different stance on Solana’s short-term prospects. According to data from the on-chain analytics firm Coinglass, traders appear to be overwhelmingly bullish, with $167 million worth of long positions currently open at around the $135 price level.

In contrast, short positions have also been building, with $83 million in short positions around the $140 level. This suggests that, despite the overall bearish sentiment, bulls are still attempting to push the price higher, preventing Solana from falling further in the immediate term.

What’s Next for Solana: Will the Bulls Win or Will the Bears Take Control?

The current situation surrounding Solana’s price is one of uncertainty. While technical indicators like the falling wedge and the TD Sequential sell signal suggest further downside risk, the presence of strong long positions from intraday traders could help prevent a major crash.

For traders looking to navigate this volatile environment, the key levels to monitor are the $136 support and the $147.50 resistance. A failure to hold support at $136 could result in a significant drop, while a break above $147.50 could lead to a notable price rally.

As always, Solana’s future price action will depend on broader market trends, investor sentiment, and technical developments. Traders should remain vigilant and adjust their strategies accordingly to manage risk in this unpredictable market.

Conclusion: Solana’s Path Forward

In summary, Solana’s price action is facing significant challenges, with bearish technical patterns suggesting the potential for a decline. The $136 support level is crucial in determining whether Solana will experience further downside or manage to stage a recovery. Traders should keep an eye on key price levels, monitor changes in market sentiment, and be prepared for volatility as Solana’s future unfolds.